Starting a new job in for a company out of Seattle...
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New Member

Starting a new job in for a company out of Seattle, but living at home in California

So I'm starting a new job as of today based out of Seattle, Washington (i.e. no state taxes). However I am living in my family home outside of Los Angeles, CA. My question is do I have to pay taxes to California? The state taxes on my income are not negligible and are significant if they have to paid in CA. My employer is in multiple states and adjust incomes based on the state so I am in effect getting paid significantly less in California that I would be in Washington, however I do not want to move as I have no one in Washington.

 

As for my last job, I was abroad for a year with my permanent residence listed in California. However I was planning to move to Washington when my job started but changed plans due to covid and everyone being work from home (they are not allowing anyone to come back to the office).

 

Is there anyway I can avoid paying CA state tax?

 

4 Replies
Level 15
Level 15

Starting a new job in for a company out of Seattle, but living at home in California

All your income is subject to tax by the state that you live in, no matter where the income is from. In addition, any income that you earn for work you do in California is subject to tax by California, even if you live somewhere else. The only way you can avoid paying California tax is to move completely and permanently out of California, and not do any work in California.

 

New Member

Starting a new job in for a company out of Seattle, but living at home in California

Even if I am technically not living in California? For the year 2020 I spent Jan 1 - August 12 abroad. I am planning to spend October 17th - December 14th out of state as well. For the living abroad, I worked abroad as well, I had no connected to the US. For the October 17th -- trip, I will be working for my new company in Seattle. Surely this does not qualify as "living" in CA just because my driver's license is issued here.

 

For the year 2021, I am planning to spend <2 months in the state of CA and am planning to live in different states (nomadic lifestyle because of covid). Does this count in living in CA as well? If it does, what is stopping me from registering an address in Seattle and saying I am a permanent resident there, since I am probably spending an equal time living there as in CA (< 2 months). Is this legal/advisable?

Level 15
Level 15

Starting a new job in for a company out of Seattle, but living at home in California

"Registering an address," whatever that means, has no effect on whether you are a resident of a particular state. And "saying" you are a resident somewhere doesn't make you a resident. Here is a link to the California FTB publication that describes what determines whether you are a California resident for income tax purposes.


FTB Publication 1031, Guidelines for Determining Resident Status


One of the things that is discussed in the publication is the concept of domicile, which is different from residence. In most cases, if your domicile is in California you will be considered a California resident, even if you spend very little time there during the year. Also note that, since every state has a different definition of a resident, it is possible to be considered a resident of more than one state at the same time. So being a Washington resident would not necessarily mean that you are not a California resident. You can have only one domicile, but you can have multiple residencies.


The California Franchise Tax Board (FTB) is very aggressive about collecting taxes. If your situation is unclear, they will probably say you are a resident, unless you can prove otherwise. "Living in my family home outside of Los Angeles" strongly suggests that the family home is your domicile.


And again, if you do any work in California, even for a short time, you have to pay California tax on that income, even if you don't live there and are not a resident.


A "nomadic lifestyle" does create complications in determining where you have to pay taxes. You might have to pay tax in several states. It might be a good idea to consult a tax professional to advise you on how to handle your situation.

 

Level 15
Level 15

Starting a new job in for a company out of Seattle, but living at home in California

I accidentally omitted the link to FTB Publication 1031 when I first posted my previous reply. I have corrected the post in the forum. Here is the link again.


FTB Publication 1031, Guidelines for Determining Resident Status

 

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