HSA adjustment for 2 states

[jackkgan]

Context:

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.

Question:

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?

[MonikaK1]

Since you indicated (including in another thread) that you lived in New York the entire year, in your own apartment, and are still living there, then you should file as a New York resident for 2024. You would file a nonresident California return IF you have California-sourced income. If your employer is in New York and you file as a New York resident, then the wages shouldn't be taxable to California.

List your New York address on your return. You would prepare the nonresident return, if needed, first. Then, you may be able to claim a credit on your New York return for tax paid (liability on the tax return, not withholding) to California.

Please also see this TurboTax tips article for more information on filing returns with multiple states.

Since you currently still live in New York, and did for all of 2024, use your New York address. Update your address with the IRS and states when you move back to California.

If you are using a California address, the California tax agency may be more likely to audit you and propose that you have remained a California resident the whole time since you didn't change your address.

You can refer to this booklet from the California Franchise Tax Board about how to determine residency for tax purposes.

See also this New York FAQ page about residency.

[jackkgan]

Thank you so much MonikaK1 !

I understand your suggestion that I should file as domicile of California, non-resident of California and resident of New York.

Please help with 2 follow up questions:

1) Regarding address: 

• Is it ok if I provide my "mailing address" as California (parent's address) under "Personal Info - Summary"? (Just to make sure that I don't miss any mails even after I leave New York)
• Permanent address under State tax as New York address? (screen shot below)

2) Please confirm below as per your suggestion on residency and domicile for California

[MonikaK1]

You are welcome! You can use the California address for mailing. Just note that the California FTB could cite that as evidence that you didn't change residency.