Texas Resident Worked part of the year in California

[tuneman01]

Helping child do her taxes.  Child is Texas resident but was assigned to work physically out of California for 4 months in 2021.  Company is UTAH based.  Her W-2 does not have any State withholding.  All the State and Local boxes are blank.  Does she need to file California state taxes?  Thank you

[MaryK4]

Yes, if she meets the filing threshold and worked in California, she would have to file a California nonresident tax return.  Do you know why there was no withholding?

[tuneman01]

No, I'm puzzled by that unless its because she kept our Texas address on her withholding.  Because they are blank I don't know if Turbo Tax can determine/figure out what to do.

[tuneman01]

Also, the w-2 does not distinguish how much was made in California (4 mths) vs Texas.  Maybe because it may be less than the CA threshold.  Very confusing to me.  Thanks

[MaryK4]

You will have to prorate the California wages.  Divide the 4 weeks by the total weeks and apply that percentage to the total wages.  @tuneman01

[tuneman01]

On a test run I did I noticed that when it came to sales tax deduction for Texas it asked From and To dates lived in Texas instead of number of months.  The problem is that she lived in Texas Jan-Feb, CA Mar-Jun, Texas Jul-Dec.  So not sure how to answer Turbo Tax date range question?  Thanks

[tuneman01]

The other twist to this is that while she was based in CA for those 4 months, she is a flight attendant that went to many states.  So services were not necessarily being performed in California but rather in whatever States the flights went to.

[RaifH]

Airline employees get special tax treatment in most states, California included:

Pursuant to 49 U.S.C. Section 40116(f)(2)(B), California does not tax the wages of a nonresident airline employee (i.e., pilot, copilot, flight attendant) unless more than 50 percent of the individual's scheduled flight time is in California. If more than 50 percent of the scheduled flight time is in California, California allocates the wages as follows: Total wages x Scheduled flight time in California = California source wages 

As long as she is a resident of Texas and her California flight time was less than 50% of her total flight time, no state income tax needs to be paid. 

[tuneman01]

Interesting, so when we do Turbotax do we just say Texas resident or do we also tell it California and let it figure out things?  Although not sure on how it deals with the split time of TX 2 mths, CA 3mths, TX 7 mths.  Thanks

[RaifH]

Yes, in most cases, just tell TurboTax she was a full-year resident of Texas. She was assigned temporarily to California by her employer. 

If she was never attempting to move to California on a more permanent basis and more than 50% of her flight time was not in California, I would just file her as a full-year resident of Texas and not report any wages to California. You can answer No, we didn't make money in other states under Other State Income. 

If she never intended to make the move permanent and did not do anything that would demonstrate she was attempting to make the move permanent, like giving up her Texas residence, getting a California ID, opening a new bank account in California, or anything else that would suggest that she was attempting to establish permanent residency, then she was a nonresident of California. 

If she did make efforts such as these, she may need to file a part-year resident return and claim the wages she made while she was residing there. If she is not sure what her future plans were, or whether she was attempting to become a California resident, looking at some examples might help.