Question

Do I have to pay California state taxes if I work remotely in China?

Forum|Forum|1 year ago
July 30, 2024
1 reply
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I worked for a CA company in 2023 and lived in CA from Jan to May but moved and stayed in China from June to Dec later. I worked remoted from June to Dec of 2023.

I do not know what is my residency status for 2023? Do I need to pay the CA tax as a whole year of 2023 or just need to pay partial tax? Wish some expert could help me to figure out, thank you very much!

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P

pk12_2

@ruby25zgheng , Should I assume that you are a US person ( citizen / GreenCard ) ?

Generally CA taxes both Non-Resident ( on California sourced income ) and Residents ( on world income).

Unlike some other states CA does not use a number of days present to determine residency -- instead it uses a number of factors to determine of one is resident ( domiciled ) ---- I would refer you to FTB instructions/discussions -- see page 5 of this --->

2023 FTB Publication 1031 Guidelines for Determining Resident Status

If I assume that you were never a CA resident and just came to the US / CA and stayed here from Jan through May of 2023 , worked / trained . and then went back to your home country ( China ) then your period of stay may qualify you for being a Non-Resident. This would mean that you will pay CA taxes ONKLY for the period that you lived and worked in CA.

There is also a possibility that you were a resident of CA and then took a job abroad, then you are a resident for the first part of the year and then a Non-Resident for the rest of the year -- the referred document also covers this case.

Is there more I can do for you ?

R

ruby25zghengAuthor

Thanks for your reply. We were CA residents and moved out in 2023. My concern is will his foreign earned income be split into half and counted on me? For example, he earned 100K outside of US in 2023 and he should not pay CA tax since he is non-resident and income source is not from CA. However, we filed married joint, I am a 5 months part-year resident in CA, then do I need to pay tax for half of his foreign income and times 5/12 months?

I am not clear about this part.

P

pk12_2

Hi pk,

Thanks for your information!

Let's make it simple: I only need to pay the CA tax for the days I stayed/worked in US in Jan 2023; the income I earned in China will not be taxed at all for CA; for my wife, she only needs to pay the CA tax for the days she stayed/worked in US of 2023(from Jan to June); she does not need to pay the tax which I earned in China even if we filed the married join since I earned that part not her; I am filed as non-resident and she filed as part-time resident, right?

Thank you again!

@ruby25zgheng that is correct --- note though that the same form 540-NR covers both Non-Resident and Part-Year Resident with California Sourced income. Also during the period the Part-Year Resident is a Resident, he/she is taxed on world income.

Is there more I can do for you ?

pk