California taxes for Florida resident?

[IggyL]

I live in FL (no state taxes) but work for a company located in CA.  All the work is done remotely.  I've never been to CA, not even for a day.  The company insisted on withholding CA taxes, because that's where "my work location is".  When TurboTax asks "How much income you earned in CA", does it want income from CA source,  which is all of my income, or income while I was present in CA, which is $0?
If I enter all of my income, then it seems to get taxed in CA, even though I don't live there.  Is that correct?

[MaryK4]

Because you worked in Florida, your income is not California-source income so you can enter 0 for the California wages.  Unfortunately, you are required to file the nonresident California tax return to get the withholding returned.    

As a nonresident, you pay tax on your taxable income from California sources. Sourced income includes, but is not limited to services performed in California

[IggyL]

Either I wasn't very clear, or I see a contradiction.  The income WAS CA-sourced, since the company is in CA.  I just physically wasn't there, doing all the work remotely on a computer.  Could you please clarify whether I still enter $0 as for CA wages, or do I actually enter all of my wages there, since all of income was from that CA company?  Thanks! 

Edit 3/31/21: Apparently I wrongly thought that the source of income was where the work was provided.  It turns out that the source is where the work was performed. So, in my case, the income is sourced in FL.

[npierson7]

You should put 0 income for California and file Non-resident tax return to refund your state income taxes paid. Location of your company don't make you liable for paying California state  income taxes. 

[IggyL]

When I tried that approach, the Payroll Dept told me that "they are a CA company, so the withhold CA taxes, and where I chose to live is of no consequence".

[DavidD66]

Working for a company based in California doesn't make it California sourced income.  None of your income is taxable by California.  Since you are a Florida resident and do not work in California, your employer should not be withholding California state taxes.  If you can't convince them to not withhold California tax, you can adjust your withholding to minimize the amount of tax withheld.  You may also want to contact the California Taxpayer Assistance Center at 1-888-745-3886.

[IggyL]

Thanks David.  I found this example in TurboTax Help, however, which appears to contradict what you said earlier.  Any thoughts on that?
================

How much of my wages did I earn in California?

Since you're filing a nonresident return for California, you should only enter wages that you earned while working in California. Don't include any wages that were earned in your resident state.

Example: Nolan lived in Oregon all year. He worked at a job in Oregon for 6 months, and he worked at a job in California for 6 months. He received a W-2 for his job in Oregon that shows he earned $40,000 in wages. Also, he received a W-2 for his job in California that shows he earned $60,000 in wages. Nolan should only report the $60,000 from his California W-2 on his California nonresident return.

================

[TomD8]

From CA FTB Publication 1031, page 6, Wages and Salaries:

"Wages and salaries have a source where the services are performed. Neither the location of the employer, where the payment is issued, nor your location when you receive payment affect the source of this income."

https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf

The advice you've been given by @DavidD66 , @npierson7 , and @MaryK4 is correct.  And your employer should NOT be withholding CA taxes from your pay. 

[IggyL]

So, following that logic - how do I determine that "source"?  Here's a simplified example: let's say, I live in FL but work for a CA accounting company that does tax returns.  Let's say, the company only has offices in CA.  I log into my computer, access financial documents stored on company's server in CA, complete all the work on my own computer, and then upload completed tax returns back to company's server.   In this case, what is "a source where the services are performed"?

[TomD8]

@IggyL 

The source in your example is Florida.  The income is sourced where you are physically located when you perform the work.

Think of it this way: mega-corporation Procter & Gamble is located in Cincinnati.  Do you think every P&G employee that accesses a company server in Cincinnati has to pay income tax to Ohio?

[LenaH]

The source is determined by where you perform the work. In your example, even if you logged into a network located in California, you are still performing your duties as an employee in the state of Florida. 

@IggyL

[IggyL]

@TomD8 

I agree with you.  In case of P&G, an employee is most likely working at a local office, and getting taxed there.  That was the case for me when I worked for a national employer.
I am still a bit concerned because an example that TurboTax provides - which I mentioned above - directly contradicts what you all nice folks are saying.

[IggyL]

Thank you @LenaH.  As I just said in my other reply, I am concerned that the example TurboTax provides in their help contradicts what all of you folks are saying. :( 

[TomD8]

@IggyL --  The example you previously cited does not contradict what you've been told.  In that example, the taxpayer worked 6 months IN Oregon, and 6 months IN California.  In your case all the work was performed IN Florida.

[IggyL]

@TomD8 That example starts with "Nolan lived in Oregon all year".  Why do you say that he worked IN California?