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Level 2
posted Aug 31, 2022 8:03:58 AM

Rental Income in CA and living in NC

I live in NC but may soon receive rental income from a property located in CA.  Do I have to pay any taxes on the rental income produced in CA even though I do not live there?

 

 

 

 

0 3 486
3 Replies
Level 15
Aug 31, 2022 9:00:54 AM


@44876 wrote:

Do I have to pay any taxes on the rental income produced in CA even though I do not live there?


Yes, because you have California source income.

 

See https://www.ftb.ca.gov/file/personal/residency-status/part-year-and-nonresident.html

Level 2
Aug 31, 2022 9:22:37 AM

I live in NC not CA.  Do I have to pay any income tax to CA or just NC? Hopefully not both? 

Level 15
Aug 31, 2022 1:43:11 PM

Your rental income is taxable by both states.  Rental income from a property located in CA is taxable by CA.  ALL your income (including the CA rental income) is taxable by NC because your state of residence can tax all your income regardless of its source.

 

The good news is that you'll be able to claim a credit on your NC return for the tax you pay to CA, so you won't be double-taxed on the rental income.

 

But you must file two state returns: a non-resident CA return plus your home state NC return.

 

When you do your taxes In TurboTax, be sure to complete the non-resident CA return first, before you do your NC return, so that the program can calculate and apply the credit correctly.