I am a Washington State resident. How do you file a State tax return for equity that was granted while living in California in 2021, but vested while living in Washington

[trevshih]

Equity was granted while I was a California resident in 2021
Equity was vested in 2023, as a nonresident (Washington State resident for all of 2023)

[ee-ea]

No state return. WA does not have an income tax.

[trevshih]

Thanks for the reply! Because the equity grant was issued while I was a resident in California in 2021, I had to pay California state income tax last year (even though I lived in Washington the entire year). I will have to do the same for 2023. Do you know how I should complete this in TurboTax?

[DawnC]

If you lived in WA all of 2023, you don't need to file a state return, unless you have a situation described in the help article below.  You only need to file a federal return for 2023.  You should not have paid CA tax last year, if you resided in WA all year.   It is understandable that you would have paid tax to CA on your 2021 tax return, since you lived there at that time. Unearned income is sourced to your resident state.  

Reasons why you would need to file a nonresident return -  do any of these apply to you?

How to file if you moved to a different state during the tax year  - when did you move from CA to WA?  

How to file an amended state tax return - If you did not live or work in CA at all in 2022, you can file an amended CA return to recoup those taxes paid while you were a resident of WA.  

[trevshih]

Thank you for your replies! I believe I need to file a Form 540NR (California Nonresident). However, I'm not sure how to start filing this out in TurboTax (I downloaded the California State return file already).

Here is what the employer said:

As someone who moved from a U.S. state to another state between 2019 and 2023*, you may be required to file multiple U.S. state tax returns by 15 April 2024 (filing extensions may be available). Your [RSU] income is included in your Form W-2 together with your other employment income (e.g. base pay, bonus, etc.). Check your statement for your equity income allocation between locations.

If the [RSU] awards that were granted to you while you were a resident of another state vested in 2023 after your location transfer, [employer] reported your [RSU] income and withheld corresponding taxes in both states based on the state requirements. Depending on your situation, you may need to file U.S. state tax return(s) for the previous and current U.S. states (in addition to your Federal tax return) to report your equity income on your annual income tax return. Your final tax liability is determined through your tax return.

[trevshih]

One follow-up here, on the W2 from the employer, it automatically withheld [$X] for California State income tax, even though I was a Washington resident for the full year.

When adding the California State module, it automatically showed the same [$X] amount as the CA Refund.

Is this accurate? 

[RobertB4444]

Yes.  You don't have any taxable income in California so you're getting all of the California withholding back.

@trevshih