2 states tax filing New York and California

[jackkgan]

California: I was born in California and have been living there until end of 2023 in my parent's house which is also my mailing address. My driving license, voting, parent's/mailing address and bank accounts are in CA. I filed my taxes in CA in 2023.

New York:  I rented an apartment in New York from Nov 2023 where I lived for all of 2024 including Dec 31st, 2024.  I visited my parent's house in CA only for few days now and then may be max. 20 days. I work remotely in NY and plan to move back to CA to my parents end around October of this year.

I downloaded both New York and California state for TurboTax. Please confirm if below look ok or if I should change anything.

1. Personal info tab

State of Residence: New York (as I lived in the rented apartment for whole of 2024)
Mailing address: CA - my parent's address where I lived until 2023

2.  State Taxes :  New York

• a) Residency Status: Turbo Tax chose New York automatically.
• b) Permanent Home address: Chose New York address as I was there on Dec 31st, 2024. (Instruction says: "The actual street address of your home in New York State as of December 31. If you moved after December 31, your permanent home address as of December 31, not your current home address").

3.  State Taxes :  California

• a) Residency Information during 2024:
  
  -- Did you become a California resident during 2024? No
  -- Did you become a California nonresident during 2024? No
  -- Were you a California nonresident during all of 2024? Yes

• b) Your State or Country of Domicile: <Chose California >
  Should I choose New York or California?
  (My driving license is CA, voting in CA, parent's/mailing address in CA< bank accounts in CA, but I have been living in rented apartment in NY since November 2023)

• c) Enter 2024 Residency information:
  • Number of days you spent in California for any purpose (during tax year): 20
  • Did you own a home or property in CA? No (as I lived in my parent's house)

• d) Residency Information Before 2024:
  • Were you a California resident before 2024? Yes
  • Did you enter California before 2024? No
  • Did you leave California before 204? Yes

• e) Period of California Residency before 2024:
  • From 10-30-1996
  • To: 10-31-2023

[MaryK4 · Accepted solution]

You most likely still have California domicile so you are a California resident.  New York has a statutory residency for taxes so you would also be a New York resident for 2024 since you lived and worked there.

You will want to complete a New York resident return, then the California resident return and claim the credit for taxes paid to another jurisdiction on your California return so you will not be double taxed.   

See Guidelines for Determining Resident Status (FTB Publication 1031).

[jackkgan]

Thank you so much MaryK4 !

Also, my W2 is from New York and not CA. My New York employer W2 shows box 12b code W with $3,425.  I had already entered the HSA information in Income section determined as only used for medical expenses. Should I change below to $0  as I am filing as resident of NY? It says "If you are not resident of California and those contributions were made by an employer who is located outside California, you may need to adjust this automatic calculation to reflect only the contributinos made by a California employer. NOTE: this amount may be 0 (zero)"

Though TurboTax knows that I am filing as resident of NY (though domicile and mailing address is CA) I am worried why it did not automatically change it to $0?

[MaryK4 · Accepted solution]

No, you do no want to change it to zero- California adds the amount back as income so TurboTax will transfer it to California but not New York.  The taxable income for each state can vary and be different from the federal, that is what is happening here.  @jackkgan