Hello,
I am currently a full-time student and resident of CA. I am currently staying with a friend and working full-time in CO. I only plan on living and working here for a year or 2 with frequent trips back to CA. I am curious how this will affect me with taxes? Will I have to pay income taxes to CA and CO? Any information on this would be greatly appreciated.
It depends. California considers school to be a “temporary absence” and not a permanent change of residency as long as you have a “permanent home” in California.
California says: students who are residents of California leaving this state to attend an out-of-state school do not automatically become nonresidents.
So if you have a “permanent home” in California, you are considered a resident. If you do not have a “permanent home” in California, then you would be a Colorado resident, regardless of whether you filed for residency or not.
Assuming you have a permanent California home, such as your parents’ house, then you would file as a full-year California resident. California requires you to report all income earned anyway, so the Golden State will tax your Colorado earnings. However, you will get a tax credit on the California return for tax paid to Colorado.
If you were a California non-resident and did not have any California income then you would as a Colorado resident.
It depends. California considers school to be a “temporary absence” and not a permanent change of residency as long as you have a “permanent home” in California.
California says: students who are residents of California leaving this state to attend an out-of-state school do not automatically become nonresidents.
So if you have a “permanent home” in California, you are considered a resident. If you do not have a “permanent home” in California, then you would be a Colorado resident, regardless of whether you filed for residency or not.
Assuming you have a permanent California home, such as your parents’ house, then you would file as a full-year California resident. California requires you to report all income earned anyway, so the Golden State will tax your Colorado earnings. However, you will get a tax credit on the California return for tax paid to Colorado.
If you were a California non-resident and did not have any California income then you would as a Colorado resident.