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I know that we have a tendency on this site to oversimplify things, but if you read the list of things you have to do to demonstrate residency elsewhere, it rea

I know that we have a tendency on this site to oversimplify things, but if you read the list of things you have to do to demonstrate residency elsewhere, it really is quite simple. If you actually live elsewhere like a normal person and are only back in California occasionally for vacation, you're at little risk of being audited and even less risk of being assessed taxes. The problem comes in when you try to have your cake and eat it. For example, you might run into trouble if you're trying to work and live in Cali five months and thirty days a year without paying California taxes. I know for me, as a relatively high income individual, the FTB did not even make a peep about our residency change. They didn't even ask for any documentation, to the best of my recollection.

kenhwang 5y ago
The big one is if you still work for a company that only has Californian offices that requires you to visit for work. That's the leash a lot of tech workers will find hard to break.
- asdfasgasdgasdg 5y ago
  Yes, being a frequent aerocommuter in an income tax state like CA is of limited use, when it comes to avoiding taxes. To me, this is a feature, not a bug. I don't want people causing massive pollution by flying back and forth to the office each week to avoid taxes. It's definitely not something that we should encourage.
  - carlivar 5y ago
    Whew definitely don't look at Elon Musk's private jet usage in that case.
cascom 5y ago
Count yourself lucky. I’d say it was California that was behaving that way…unless you take the position that you can be a resident in multiple states…in which case you should be able to vote in multiple states, claim unemployment in multiple states, have driver’s licenses in both states etc.
- asdfasgasdgasdg 5y ago
  If they did request documentation, that would have been fine with me in any case. I had it, and it's reasonable for them to request it. They do have a legitimate interest in preventing and prosecuting tax fraud.
igetspam 5y ago
I moved six years ago. I got demand letters from the CA tax board for four years after I left. I didn't owe them a dime but they still tried. Had to call and submit paperwork every time. At least the CA tax board people are super agreeable. It was annoying but less so because they were nice.
- asdfasgasdgasdg 5y ago
  This year was the last year I owed CA taxes. You still owe them on shares that vest that you earned when you were in CA. Looking forward to not filing taxes with them next year.
  - Jarwain 5y ago
    Do you know if this is true wrt options as well?
    - entangledqubit 5y ago
      Not a tax expert but IIRC since they were earned in CA, they generally are taxed when they result in a net gain of some sort (e.g. sold directly or exercised). Go to Section E of the FTB's publication 1100.
      - Jarwain 5y ago
        urgh maybe I should talk to a tax expert. The section discusses NSOs but I have ISOs. I also don't know how it's impacted by the fact that the company I work for is based in Boston (options were granted after I moved to Cali though), and I'm mainly curious as to how it would be impacted if I move to an income-tax-free state before the options vest
        junar 5y ago
        FTB Pub 1004, Section D goes into ISOs in greater detail. https://www.ftb.ca.gov/forms/misc/1004.html#D-Incentive-Stock-Options https://www.ftb.ca.gov/forms/misc/1004.html#D-Incentive-Stoc...
dragonwriter 5y ago
> For example, you might run into trouble if you're trying to work and live in Cali five months and thirty days a year without paying California taxes. Like many states with income taxes, California taxes income earned in California by nonresidents, so if you work in California at all you will owe California taxes.
- swiley 5y ago
  I didn't realize it worked that way until WFH. I guess it makes some sense but it's really annoying because despite being able to work from anywhere actually working outside your home state for any amount of time becomes really complicated really fast.
  - lotsofpulp 5y ago
    Only hop around between WA/NV/TX/FL/AK/WY/SD.
    - notsureaboutpg 5y ago
      youre missing states eith no income tax like TN
- tbihl 5y ago
  I remember this being publicized some years back when a Super Bowl was being held in California, and someone calculated that one team would have to pay California more in taxes for their presence in the state than they would themselves be paid for the privilege of losing the Super Bowl.
  - ryan_lane 5y ago
    CA taxes the income for the time period you work in the state. They couldn't pay more in taxes than they earned. The amount they paid in taxes for CA was likely quite low, as their income during that time probably wouldn't come close to the top bracket for yearly income.
hamburgerwah 5y ago
I recall an investor friend who made a lot of money in the 1st dot com. He moved to nevada according to the law well before his windfall. CFTB hired private investigators to just follow and harass him constantly for almost two years while they tried and failed to assess him taxes he did not owe them.
- unstatusthequo 5y ago
  CA FTB has an office in Reno for this very purpose.
- ryan_lane 5y ago
  It doesn't matter when your windfall happens. If you acquired stock while living in the state, you owe taxes on that when it becomes liquid. He owed those taxes.
jjav 5y ago
> If you actually live elsewhere like a normal person and are only back in California occasionally for vacation, you're at little risk of being audited and even less risk of being assessed taxes. It seems simple but in practice often is not for anyone that has enough money for the state to care about. I know many people who moved out and California was aggressively after them for years even though they fully moved and lived elsewhere and had sold away every last scrap of property they had in CA to avoid having any connection.

kenhwang 5y ago

The big one is if you still work for a company that only has Californian offices that requires you to visit for work. That's the leash a lot of tech workers will find hard to break.

asdfasgasdgasdg 5y ago
Yes, being a frequent aerocommuter in an income tax state like CA is of limited use, when it comes to avoiding taxes. To me, this is a feature, not a bug. I don't want people causing massive pollution by flying back and forth to the office each week to avoid taxes. It's definitely not something that we should encourage.
- carlivar 5y ago
  Whew definitely don't look at Elon Musk's private jet usage in that case.

cascom 5y ago

Count yourself lucky. I’d say it was California that was behaving that way…unless you take the position that you can be a resident in multiple states…in which case you should be able to vote in multiple states, claim unemployment in multiple states, have driver’s licenses in both states etc.

asdfasgasdgasdg 5y ago
If they did request documentation, that would have been fine with me in any case. I had it, and it's reasonable for them to request it. They do have a legitimate interest in preventing and prosecuting tax fraud.

igetspam 5y ago

I moved six years ago. I got demand letters from the CA tax board for four years after I left. I didn't owe them a dime but they still tried. Had to call and submit paperwork every time. At least the CA tax board people are super agreeable. It was annoying but less so because they were nice.

asdfasgasdgasdg 5y ago
This year was the last year I owed CA taxes. You still owe them on shares that vest that you earned when you were in CA. Looking forward to not filing taxes with them next year.
- Jarwain 5y ago
  Do you know if this is true wrt options as well?
  - entangledqubit 5y ago
    Not a tax expert but IIRC since they were earned in CA, they generally are taxed when they result in a net gain of some sort (e.g. sold directly or exercised). Go to Section E of the FTB's publication 1100.
    - Jarwain 5y ago
      urgh maybe I should talk to a tax expert. The section discusses NSOs but I have ISOs. I also don't know how it's impacted by the fact that the company I work for is based in Boston (options were granted after I moved to Cali though), and I'm mainly curious as to how it would be impacted if I move to an income-tax-free state before the options vest
      - junar 5y ago
        FTB Pub 1004, Section D goes into ISOs in greater detail. https://www.ftb.ca.gov/forms/misc/1004.html#D-Incentive-Stock-Options https://www.ftb.ca.gov/forms/misc/1004.html#D-Incentive-Stoc...

dragonwriter 5y ago

> For example, you might run into trouble if you're trying to work and live in Cali five months and thirty days a year without paying California taxes. Like many states with income taxes, California taxes income earned in California by nonresidents, so if you work in California at all you will owe California taxes.

swiley 5y ago
I didn't realize it worked that way until WFH. I guess it makes some sense but it's really annoying because despite being able to work from anywhere actually working outside your home state for any amount of time becomes really complicated really fast.
- lotsofpulp 5y ago
  Only hop around between WA/NV/TX/FL/AK/WY/SD.
  - notsureaboutpg 5y ago
    youre missing states eith no income tax like TN
tbihl 5y ago
I remember this being publicized some years back when a Super Bowl was being held in California, and someone calculated that one team would have to pay California more in taxes for their presence in the state than they would themselves be paid for the privilege of losing the Super Bowl.
- ryan_lane 5y ago
  CA taxes the income for the time period you work in the state. They couldn't pay more in taxes than they earned. The amount they paid in taxes for CA was likely quite low, as their income during that time probably wouldn't come close to the top bracket for yearly income.

hamburgerwah 5y ago

I recall an investor friend who made a lot of money in the 1st dot com. He moved to nevada according to the law well before his windfall. CFTB hired private investigators to just follow and harass him constantly for almost two years while they tried and failed to assess him taxes he did not owe them.

unstatusthequo 5y ago
CA FTB has an office in Reno for this very purpose.
ryan_lane 5y ago
It doesn't matter when your windfall happens. If you acquired stock while living in the state, you owe taxes on that when it becomes liquid. He owed those taxes.

jjav 5y ago

> If you actually live elsewhere like a normal person and are only back in California occasionally for vacation, you're at little risk of being audited and even less risk of being assessed taxes. It seems simple but in practice often is not for anyone that has enough money for the state to care about. I know many people who moved out and California was aggressively after them for years even though they fully moved and lived elsewhere and had sold away every last scrap of property they had in CA to avoid having any connection.