CA Resident: Opportunity to work remotely from WA until the end of the year. Should I change residency?

[jongen]

Hi,

I have been a tax-paying resident of California for years. Starting in March 2020, due to COVID-19, my employer asked us to work remotely. I have been in Washington State with my partner ever since. It is likely that I will work remotely until the end of the year or even 2021.

Question:

1. Is it in my interest to change residency? WA does not have income tax, but CA does.

   1. Since we are already almost in June, am I too late? Or can I declare that I was in WA since March?

   2. My employer would still be based in CA. Would that work?

2. Do I actually have the obligation to change residency (drivers license, license plate, voter registration, etc.) if I am only planning to be in WA temporarily? If there is no tax benefit, I do not want to make my tax filing situation more complex. I can easily keep a postal address in CA to receive mail until I am back in 2021.

Thanks

[TomD8]

Your state of residency for tax purposes is determined by tax law.  California's rules for determining residency are complicated, and are detailed in this reference:  https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf

I suggest you read pages 4-6 to determine if CA is going to consider you a resident (for tax purposes) for all or part of 2020.

Your income - regardless of where earned - is taxable by CA for any period of time for which CA considers you a CA resident.