I moved with my wife to Germany in late 2019, and recently returned to the United States for (what will most likely be) a temporary visit. There are some complicating factors, though, and I am not sure if I should be considered a tax resident of the state I was in during the end of 2020. Any help is requested and appreciated!
-I arrived in California from Germany on November 18, 2020. Thus I spent 6 weeks in California in 2020.
-I stayed in a hotel the first 10 days and have stayed with parents since then
-My wife is still in Germany
The complicating factors:
1. My wife and I are separated, which is why I returned. It seems likely we will reconcile but I cannot say for sure at this point in time.
2. I applied for and was approved for EBT (Food Stamp) benefits in CA in December. I started a Covered CA health plan on January 1st.
3. I work remotely for a business out of Wisconsin - this was also the case when I lived in Germany. So I will need to file a Wisconsin non-resident state return on that income. This may not matter but I thought I'd mention it.
TurboTax on the section on residency says the below. I also looked up California's guidelines (2020 Publication 1031 Guidelines for Determining Resident Status). Between these two sources it is not clear that I should have been considered a resident in California because the intention of the visit was temporary. *However* I did receive EBT benefits and I would guess CA only wants those to go to residents.
Truth be told, it is such a low amount, I'd be happy to return these benefits in return for simpler taxes, if that were an option.
Can anyone provide more guidance on this?
Date You Established Residency
The date you choose as the first day of residency can coincide with one of the following events:
- You or your spouse arrived in the state or country
- Your belongings arrived
- You or your spouse started work
- You started renting your new place
- You purchased your new home
- You or a family member enrolled in school
- You or your spouse registered to vote
- You or your spouse applied for a state driver's license
No. You are not a resident of California. You said you moved with your wife to Germany in late 2019. I assume that means your move was permanent, not temporary. Therefore, you abandoned your California residency in 2019 and became a permanent resident of Germany.
California defines residents as
- Present in California for other than a temporary or transitory purpose.
- Domiciled in California, but outside California for a temporary or transitory purpose.
You do not meet either definition.
California also has a safe harbor for individuals who leave the state under employment-related contracts. This does not seem to apply to you since you work for a Wisconsin company.
Regardless, California grants safe harbor for return visits to California that do not exceed 45 days during any taxable year covered by an employment contract. Such visits are considered temporary. By my count, you spent 43 days in California in 2020 (November 18 to December 31). Therefore, you would qualify for the safe harbor.
Learn more at 2020 Guidelines for Determining Resident Status.
Thank you so much for this response Ernie!
You are correct, the move to Germany was permanent at the time (at least for the duration of my wife's 3 year contract).
I took a look at that publication and unfortunately Safe Harbor won't apply as I was not a California resident prior to the Germany move.
I should also clarify a couple other things. I do not plan to return to Germany. If my wife and I reconcile, I would be rejoining her in Australia after she starts a new contract there in the summer. Finally, I filed a "de-registration form" in Germany as of 11/30/2020 stating I was no longer living in Germany.
Cleary, my future plans are unknown, which is one of the reasons my status is unclear to me. However the de-registration form I filed in Germany could reasonably be interpreted as severing my residency in Germany, and therefore I would need to pay US taxes as a resident of the state I came to.
What do you think?
It depends. If you moved to another state or country for a temporary visit, then you may file California income tax return as resident. A resident in California must meet one of the following requirements:
- Present in California for other than a temporary purpose.
- You are domiciled in California - location of your residence, financial institution, drivers license, social ties and many more.
See link, part-year resident and non-resident, for more information.