How important is for Green Card holder living abroad to state I'm living abroad on tax return vs. CA state?

[yoshl]

I'm a green card holder who lived in CA but have been living abroad since 2021 with a reentry permit which allows me to remain outside the U.S. for 2 years without losing the green card. I returned to the U.S. in 2023 and reapplied for the reentry permit to stay out of the U.S. for another 2 years. The reentry permit is meant to be temporary and that I intend on returning to the U.S. On Dec. 31 of 2021, 2022, and probably 2023 I would be abroad. Am I supposed to select that my permanent residence is now abroad in the info section? Or should I keep it CA? I have to file CA state taxes anyways, and it is where I intend on returning but wasn't sure what to do. 

update: looking at the section and it says "

State of residence (on December 31, 2022)

Usually your state of residency is the place you intend to be your permanent home. You aren't living in the state for a temporary purpose. It's the place you return to after a vacation, business assignment, or away at school.

You can only have one permanent home. States often refer to this as your domicile.

Some states have a "days test" and if you spend more than a certain number of days (often 183 days) of the taxable year in their state, they consider you a resident for that year."

[Anonymous_]

@pk?

[yoshl]

Can someone help me with this one? Thank you. 

@rjs @Critter-3 @VolvoGirl 

[Critter-3]

CA doesn't tax you if you are not living or working in the state of CA.  If you have CA sourced income like a rental property then you would file a non resident return to report that income only. 

[yoshl]

Does just changing the selection from CA to foreign country under "Your personal info" > State of residence (on December 31, 2022) do this? I've heard that CA doesn't allow you to cut ties so easily. 

[pk]

@yoshl , most state like to hang-on to their residents especially if they have significant  financial and other connections to the state.  But it also allows  resident to be temporarily absent  from the State without losing residency --- more like interrupted residency .

Since I do not see your exact information --- when did you leave the state, what assets / connects do you have with the state ( bank, house, driver's license,  family staying back etc. etc. ) ,  ---- I cannot  give a more definitive answer.  Generally it is a case of "closer connection" including State sourced income  that determines whether you file as a resident or as a non-resident.

Is there more I can do for you ?

[yoshl]

I left the U.S. on the reentry permit in 2021. I still have my driver's license, cell phone, banks in CA. @pk  

[pk]

@yoshl , California generally allows one to be considered a Non-resident if  the taxpayer is away from the state for an uninterrupted 546 days  and  no more than 45 days  present ( for any purpose ) in the current tax year.  This is all called out in  CA pub 1031.   I have not looked at the actual statute and so suggest  that you call  California  Franchise Tax board  and discuss the situation.  They are usually very helpful.

Does this help ?

[yoshl]

@pk @Critter-3 

I'm currently filling out the CA state questionnaire on TurboTax and have come across the question, "Enter your state or country of domicile." TurboTax defines domicile as the place where you've established your true home and plan to make your permanent home.

I've been living abroad for 2 years now (never been back to CA since I left) but I'm out of the country as a green card holder with a reentry permit, which indicates my intention to return to the U.S. and maintain my green card status. Given this situation, how should I answer the domicile question on TurboTax? I don't want signal to the U.S. that I've made the foreign country my permanent home and that I'm not returning by answering this question. 

update: I answered that I spent 0 days in CA in 2022 but selected that my domicile is CA. 
I have no idea if this is what I'm supposed to do. I also wrote down from what day to what day I resided in CA. 
Since I didn't reside for even one day in CA in 2022, I specified all CA income adjustments from my Federal amount to 0. Is that what I'm supposed to do? Lastly, although TT is allowing me to file CA taxes, it's giving me a way to delete CA taxes. Should I still file the CA taxes to report that I didn't spend any days in CA ?

[pk]

@yoshl , unless you have a home in CA, I would answer you are domiciled abroad (  host country ) --this would satisfy your 1-1/2 years away from California and therefore a non-resident.

I was in Europe ( a long time ago ) with a Green Card, except in my case  I had substantial connection to State of MI and therefore paid MI taxes.  In your particular case  and based on pub 1031 of California, you are Non-Resident of California

Hope that clarifies  this issue 

pk

[yoshl]

I no longer own my home but my daughter still lives there and I put down my mailing address as the address in CA. Is it important that I change the mailing address to the one abroad or am I over thinking this? @pk 

I had no CA source income and i'm a nonresident so I can delete CA state taxes on TT and don't need to file right?

[yoshl]

@Critter-3 Do you happen to know the answer to this? Thank you. 

[pk]

@yoshl ,  my opinion is that you could delete  CA return ---main reason is because you have NO CA sourced income, NO US income,  and because  you have been away from CA for at least 546 consecutive days.  Federal you still have to file to be able to take advantage of  Foreign Earned Income Exclusion and/or otherwise ameliorate  double  taxation effect.

Is there more I can do for you ?

If I have satisfied  your needs , please consider  giving "cheers" -- these count -- and mark the response as " "accepted"

Namaste ji

pk  

[yoshl]

I do have US income. Social security, dividends, and interest. I don't have earned income overseas and in the US so FEIE is irrelevant to me. @pk 
Will definitely thumbs up all your posts. Thank you. 

[yoshl]

Also. I'm retired and medicare gets taken out of my social security income. I continue to use Kaiser registered as CA for my medicare. Does that change anything? Thanks