I moved from NYC to CA on 9/1/2020. When going through my taxes over the weekend, I saw that NY state wants to tax me for my entire salary / income as if I was a resident of NY for the entire year and CA wants to tax me for the portion of my salary I earned while residing in CA for 4 months. Meaning, I'm essentially being double taxed for that 4 month period. Is this how it should occur?
And more broadly, I'm concerned that next year I would be double taxed for my entire income -- because I'd be working for an employer based in NY while living in CA. I'm curious if any of you have advice / thoughts on how to navigate this? Thanks so much!
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You will need to claim a credit for taxes paid in another state once you moved to California.
New York taxes on all income from New York sources so you do need to pay taxes there.
As a California resident, you are also taxed on all income. However, as your income is from New York sources and is also taxed in New York, you will be able to claim a credit on your resident state tax return for any income taxed by both New York and California.
To ensure your return is calculated correctly, you will need to confirm a few items:
In the My Info section of TurboTax, confirm that you have entered the correct state information:
Please note the following as it will affect the calculations:
When you are preparing more than one state return, make sure you prepare the part-year resident New York state tax returns first. Be sure to answer the questions correctly to ensure only income sourced to that state specifically are reported.
You will then prepare your California return. Be sure to answer the section about credits for taxes paid in another state to ensure you are not taxed twice on the same income in 2 states.
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