Moved and worked remotely

[hfang1989]

Hi,

I need help to file my tax return with my situation. 

I was working in CA and my wife didn't have job until she found one in NJ.  She moved to NJ and started to work on 1/16/2020 in NJ. Later, the pandemic kicked in and she returned to CA on 6/26/2020 and worked remotely for the same company in NJ. Her company didn't help her to change the tax withholding. I didn't move and worked for my company all the time in 2020 in CA. 

I think my situation doesn't affect the federal tax return (correct me if I am wrong). However, I don't know how to handle the state tax return. Could anyone tell me how to do it? Thank you!

[DianeW777]

You are correct, the federal return is filed with all the income regardless of work location. However, it may help to add another state in the W-2 to put zero wages for you in NJ.

File a NJ return as part year resident for your wife. It indicates you must use the federal filing status since your wife was not a resident for the entire year. The income you earned must be adjusted so that you are not taxed on that income.  Some states use a proration of the tax amount so don't be surprised if you see all of the income.  Look further if that is the case when you view the return.

• Your New Jersey filing status must match your federal filing status unless you meet an exception or have a special circumstance.
  • Married/CU couples: One is a resident and one is a nonresident If you and your spouse reside in different states for the entire year and only one of you lives in New Jersey, the resident spouse can file a resident return using the filing status Married/Civil Union Filing Separately, even if you are filing a joint federal tax return. The resident spouse calculates income and exemptions as if they filed a separate federal return.

File a CA return as full year resident for you. And it appears to have the same rules as NJ.

• Exception - If you file a joint return for federal purposes, you may file separately for California if either spouse was one of the following:

  • An active member of the United States armed forces or any auxiliary military branch during the year
  • A nonresident for the entire year and had no income from California sources during the year

Adjust your CA return if necessary so that only the income you earned is taxed.  The same information applies here as written above for NJ.

[hfang1989]

Hi Diane, 

Thanks for your reply. I am still confusing when I file the CA tax return. It still asks me my residency information in CA tax return. The options it gives me are: Full time non-resident, part time resident with move into CA, part time resident with move out CA. I don't know what I should answer. The fact is my wife is a part-time resident, but not me (I am full time resident of CA). However, we file the tax jointly. Which answer should I give? Thanks.

[AmyC]

In reading your story again, I have to wonder about your wife moving to NJ. Did she really move there with the intention of that being her new home while you were in CA? Did she change her license, place of voting and settle down into a new life or was she there just waiting and hoping for another job? More passing through?

Perhaps you were both residents of CA the whole year and your wife was just working in NJ for part of the year? File nonresident NJ and resident CA with credit for tax paid to NJ.

If she was a resident of NJ for part of the year, then you would need to file as part year CA residents just to get the money straightened out for CA to tax just CA money. All of yours and part of hers.