Hi there! I am an employee at a boutique consulting firm based in the Bay Area. I just moved to Hawaii for 6 months. I was not planning on changing my address officially b/c I don't want to worry about tax issues, and neither does my employer since it's temporary! Is this technically legal if the move is temporary? Would there be a benefit tax-wise for myself and/or my employer for recognizing me as a Hawaii resident instead of a California resident?
Thanks in advance!
Hi! I am a CPA with TurboTax Live. You would file a non-resident return for Hawaii for the time you worked there. You would get a credit for the taxes you paid to Hawaii in your home state (CA). Whether you file a resident return depends on if you intend to remain in the state indefinitely. Based on your responses, you would likely be a CA resident the entire year.
It sounds like you will be telecommuting, so if working in Hawaii and earning greater than $4488 in wages (single individual) then your will be considered a part year resident, which will require a Hawaii state tax return. A good move will be to update your residence with your employer and arrange for proper state withholding. Btw, this addresses only state income tax. Hawaii will have a myriad of other laws regarding living in the state, such as obtaining proper Hawaii identification.