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Employer refuses to change work location/update w2 despite me breaking residency from CA

I moved from California to Florida in 2020. I went to Florida in March and then went back to CA in June to finish moving out of my apartment.

 

However, when I reached out to my employer to change the work location (for withholdings), they declined, stating that they will not change people's work locations during COVID.

 

As a result, my w2 still states that my work location is CA, despite me not having been there since June. (I have no accounts or assets of any kind in CA).

 

1) Do I have to pay CA taxes because my w2 says CA and won't correct it? Or can I still file as a partial resident to CA?

 

2) Do I need a tax attorney now to deal with an audit if I file as a partial resident?

 

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1 Best answer

Accepted Solutions
ToddL99
Expert Alumni

Employer refuses to change work location/update w2 despite me breaking residency from CA

No, you do not have to pay CA tax just because your W-2 says CA - as long as you have established legal residency in FL and are performing your work in FL.

 

You should not need and a tax attorney to deal with this issue going forward. CA is fairly aggressive in its tax collection, so they may contact you for additional information.

 

When preparing your 2020 state return, file as a part-year resident of CA and allocate your income as appropriate to CA and FL (there is an interview in the CA state tax program to do this).  If your employer withheld CA state tax for the entire year, you should get a refund of CA tax withheld while a resident of FL.

 

Your employer can continue reporting your wages as "CA income", but as long as you are physically performing your job in Fl (as a FL resident), you should be able to avoid paying CA tax on your earnings.

 

Some states have passed "convenience of the employer" legislation which means people in your situation would be liable for state tax where their employer is located. CA hasn't done that (yet), but be aware.  See State income tax considerations for remote employees during COVID-19 for a discussion of this issue. The states that have enacted such a rule include Connecticut, Delaware, Nebraska, New York and Pennsylvania. 

 

FYI - If you still have A CA driver's license and voter's registration, then you are probably still a CA resident and subject to CA tax on your income, no matter where you work. 

 

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3 Replies
ToddL99
Expert Alumni

Employer refuses to change work location/update w2 despite me breaking residency from CA

Please clarify - did you continue working for this employer after moving to FL?

Employer refuses to change work location/update w2 despite me breaking residency from CA

Yes. I still work for the same employer. 

ToddL99
Expert Alumni

Employer refuses to change work location/update w2 despite me breaking residency from CA

No, you do not have to pay CA tax just because your W-2 says CA - as long as you have established legal residency in FL and are performing your work in FL.

 

You should not need and a tax attorney to deal with this issue going forward. CA is fairly aggressive in its tax collection, so they may contact you for additional information.

 

When preparing your 2020 state return, file as a part-year resident of CA and allocate your income as appropriate to CA and FL (there is an interview in the CA state tax program to do this).  If your employer withheld CA state tax for the entire year, you should get a refund of CA tax withheld while a resident of FL.

 

Your employer can continue reporting your wages as "CA income", but as long as you are physically performing your job in Fl (as a FL resident), you should be able to avoid paying CA tax on your earnings.

 

Some states have passed "convenience of the employer" legislation which means people in your situation would be liable for state tax where their employer is located. CA hasn't done that (yet), but be aware.  See State income tax considerations for remote employees during COVID-19 for a discussion of this issue. The states that have enacted such a rule include Connecticut, Delaware, Nebraska, New York and Pennsylvania. 

 

FYI - If you still have A CA driver's license and voter's registration, then you are probably still a CA resident and subject to CA tax on your income, no matter where you work. 

 

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