Part-Year California Resident

[antied77]

Hello, I moved to California in August of 2024. I started earning wages in CA at the same time. I am trying to complete the 540NR and the instructions read, "Do not deduct income that was earned while a nonresident of California or from sources outside of California. There must be a difference in tax law. Generally, if a California resident cannot subtract the income in column B, a nonresident or part-year resident may not subtract income in
column B. " This reads to me that I am no allowed to deduct my earning while I was a nonresident of California even if the income I earned during the non residency was done from CA. I read elsewhere that only wages made from CA sources or when in CA had to be taxed. Can you help me understand why I would need to pay CA state taxes on wages I earned and already paid taxes on in another state? I'm hoping this is incorrect.

[BillM223]

The way that most states deal with double taxation is that they allow the one state resident to deduct taxes paid to other jurisdictions on the same earnings. Please see "Other state tax credit". This is a common mechanism for most states.

In CA, you add a Schedule S to your return to report your Other State Tax Credit. This will flow through your CA return to reduce your state tax.

If you entered your places of living correctly, TurboTax should handle this automatically.

[TomD8]

 "I read elsewhere that only wages made from CA sources or when in CA had to be taxed."

That is correct.  You will be filing a part-year resident tax return in both the state you moved from and in California.  Income you earned in the "old" state is taxable by CA only if it meets those criteria.  TurboTax has a help article on how to file part-year resident state returns:

How do I file a part-year state return?