Sch CA(540NR): I'm self-employed and resident of NV and my wife is a traveling nurse temporary assignment in CA.

[Mike2025]

My wife is not a resident of California, however she does travel for temporary assignments throughout the year and receives all wages via W-2 (state of CA) with taxes withheld.   I am self-employed in the state of Nevada and have no association with California for income.  

As I do our joint taxes errors come up regarding this Sch CA(540NR).  I'm not sure how this applies as it relates to self-employment in California.  Which neither of us qualify.   Can you help me to sort this out?  Thank you!

[MaryK4]

California requires nonresidents to prepare a return "as if" you are California residents, then applies the tax to only the California income that your wife earned on the W2.  You have to make any state adjustments to the non-California Self-Employment income so that you can get the proper California tax.  

[Mike2025]

I think I understand.  But, let me make sure 🙂

We are filing jointly and she did have taxes taken out of her W2 from California.  Also, this was the only income she earned that year.  Nothing in Nevada.  

However, this Sch CA(540NR) keeps mentioning "one-half self employment tax deduction computed for the ratio in form instructions".  She was not self employed.  That's the confusing part for me.  And wouldn't the state be satisfied that on her W2 they had collected all associated taxes for her work in CA?  I appreciate your help.

[Hawkinsb]

Bump for Vision 

[BrittanyS]

California is a community property state.  Community Property is defined as, "Community income corresponds with community property, which are assets or other property held in common by married couples in community property states. These states follow the rule that all assets acquired during a marriage are considered co-owned equally by each spouse."  

This can affect you even if you file a Married Filing Separate return for California.  MFS returns in a community property state will factor in the filing spouses full income and half the non-filing spouses income.  If you were self employed this is why it is calculating part of your self-employment income.  

For more information, see the link below:

• Community Income
• CA Community Property

@Mike2025