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I mean, doesn't California tax you even if you live somewhere else but work in California?
by cptroot 6y ago
I mean, doesn't California tax you even if you live somewhere else but work in California?
- proverbialbunny 6y agoCalifornia will not tax you if you live out of state, but if you have anything registered in CA, like you have a car registered in CA, or you own property in CA, like are a landlord, then CA will want you to pay taxes as if you live there, because the state can't identify if you live there or not.
- badfrog 6y agoIf you physically work in California yes. I don't know what happens if you work for a company whose HQ is in California but you're physically in a different state.
- steffan 6y agoFacebook and Google, among others, have offices outside of CA. Employees of those offices do not pay CA income tax. (They do however, for their respective states)
- vitus 6y agoTo expand on this: Several of my coworkers who moved from the Bay Area still pay CA taxes for stocks that were granted before they moved, which means potentially 4 years of paying taxes for two separate states. On the plus side, their CA tax bracket is much lower, since they don't have salary / bonus / new stock grants.
- jstepka 6y agoCompanies setup subsidiary corporations in states employees are in if the tax situation makes sense. This is especially true if you use an outsourced HR company like TriNet for payroll, which many startups do.
- bsharitt 6y agoI work remotely for a company based in California. I pay no California taxes. We also have offices in other cites around the US and the world and have had remote people as a permanent feature for a while.
- beaner 6y agoWould be interesting to hear the answer if anyone knows it.
- azimuth11 6y agoThere are caveats as mentioned in this thread, but in general, no you do not pay CA taxes if you live in another state and your company's HQ is in CA.
- ghaff 6y agoIt depends on what state you're a resident of and where you do your work. I live in MA and, when I worked in NH, I had to pay MA income taxes because I live here even though NH has no state income tax. Now I work for a company with offices in MA (even though that's not where the official HQ is) so I still pay MA taxes; doesn't matter if I'm remote or not. Were I to move to NH and work remotely, my understanding is I would then not pay state income tax (although I would if I were assigned to an MA office).
- steffan 6y agoPeople will just transfer to satellite offices / companies will establish a presence outside of California. I'm sure at some point the CA legislature will attempt to tax any "work that has a material benefit to a California business", but that is a shaky legal argument.
- qppo 6y agoAfter MD v Wynne, I think they'd have to give tax credits to income tax paid in other states if they tried that.
- ninkendo 6y agoYup, this is what happened to me this tax year, but only for stock options, not for regular income. I work for a CA company, but remotely from the midwest (home office), and I pay CA taxes for the stock vests I got from my company last year (because I lived in CA when the grant occurred.) But I also paid taxes in my home state for the same stock. I just filed an "Other State Tax Credit" in CA (form 540 Schedule S), which effectively made CA give me a refund equal to the amount I paid in my home state. Same thing would happen if my regular salary was taxed. It effectively means you pay the higher tax of the two states: if the state you live in has higher taxes (NY for instance), CA would have to essentially refund you all the taxes you paid; whereas if you live in a cheaper state (more likely), you effectively pay a CA income tax rate overall, since CA is keeping the remainder after refunding you for the other state.
- closeparen 6y agoTech companies are Deleware businesses, though. You'd have to do something even crazier, like "a business with a significant California business."