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Itsnoc
New Member

I want to work in Tennessee but have a California residence without paying CA tax.

A company is offering me employment in Tennessee and permits remote work.  My plan is that I will get an apartment in TN, get my TN driver's license, and update my voter's registration, car registration. I'll get a library card if it helps, as well as update my credit card addresses, cell bill, etc. 

 

However I do intend to also keep my California apartment and live here as much as legally allowed.

 

Rent in TN is so cheap, that my TN residence will be larger than my CA home. 

 

With all of this said, can I legally avoid paying CA state taxes? I ask because the tax savings would actually pay for my TN home and then some. I do worry about a rule that I read that the CA state tax board is always presumed correct or something.  

 

Does all of the paper trail I'm creating spare me having to prove that I live in TN more than CA? Would I have to do more? 

 

What would I have to change to correctly substantiate my TN residency? 

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5 Replies
Hal_Al
Level 15

I want to work in Tennessee but have a California residence without paying CA tax.

"You will be presumed to be a California resident for any taxable year in which you spend more than nine months in this state. Although you may have connections with another state, if your stay in California is for other than a temporary or transitory purpose, you are a California resident."

 

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

Itsnoc
New Member

I want to work in Tennessee but have a California residence without paying CA tax.

Thanks for the reply.  To be clear(er), the employer is physically in TN, it's W-2, and per the terms of my employment, I'm already required to be in TN 3 months out of the year. Would this mean if I made it 4 months that could be considered a TN resident in CAs eyes? 

Hal_Al
Level 15

I want to work in Tennessee but have a California residence without paying CA tax.

Although high tax states, like CA, take a dim view of their residents establishing 2nd homes, in no-tax states, and declaring new residency, the fact that your job is in TN, makes it highly likely that you will be considered a TN resident, for tax purposes, even though you work remote.  But, there is some risk. 

 

California Residency rules:  https://www.ftb.ca.gov/forms/2021/2021-1031-publication.pdf

 

Q. Would this mean if I made it 4 months that could be considered a TN resident in CAs eyes? 

A.  Probably. 

 

Even if you are a TN resident, you have to pay CA tax on the income earned while you physically work there.  So, you will be filing a  non-resident CA return, even if you are a TN resident. 

Hal_Al
Level 15

I want to work in Tennessee but have a California residence without paying CA tax.

Previous replies edited. 

TomD8
Level 15

I want to work in Tennessee but have a California residence without paying CA tax.

"What would I have to change to correctly substantiate my TN residency?"

 

To add a bit to @Hal_Al 's answers, if questioned you'd have to prove to the California FTB that you have changed your domicile to TN.   Note that "domicile" and "residence" are not necessarily the same thing.  I suggest you read the section Meaning of Domicile on page 10 of this reference, which @Hal_Al previously provided to you:

https://www.ftb.ca.gov/forms/2021/2021-1031-publication.pdf

 

In particular, read the paragraph under Change of Domicile.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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