Level 9

CA W-2 issued to NV resident

Forum|Forum|3 years ago
July 20, 2022
2 replies
10 views

Never ran into this. Any suggestions?

Client works for a national non-profit organization and was transferred to Nevada. His salary is funded by the CA office for three years. W-2 issued from the CA office and marked CA. Work is done in the Nevada desert. Visits CA for less than 3 weeks a year. NO withholding for income tax. He doesn't care about SDI (disability insurance). All facts support he's a NV resident

Question: how to handle the filing with a W-2 issued by an office in CA marked as CA for the state?

File CA Part year resident in the year of move (2022) and CA non-resident return for the next few years?

Tax Talk

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qbteachmt

Level 15

Visiting CA isn't the same as "went to the main office, and that is 3 weeks of work in CA."

"Remember, the income sourcing is determined by the location where the employee services are actually performed, not the location of the employer. A nonresident programmer who monitors and upgrades satellite dish software for a Los Angeles-based media company, all while sitting comfortably in front of his computer in his Austin, Texas condo, doesn’t earn California-source income and doesn’t have to pay California income taxes, as long as the work is performed outside of California."

From: https://www.palmspringstaxandtrustlawyers.com/nonresidents-working-remotely-for-california-businesses/

Don't yell at us; we're volunteers

sjrcpa

Level 15

I would not file a part year CA return if he never lived in CA. Or file part year if he did live in CA for part of the year. I can't tell. " was transferred to Nevada" You don't say from where.

The income earned during the 3 weeks in CA is probably taxable by CA - on a CA nonresident return.

Your client needs to get correct paperwork filed with the payroll dept of his employer to show he is not a CA resident.

The more I know the more I don’t know.

joshuabarksatlcsAuthor

Level 9

He was transferred to NV from CA. Before the transfer in 2022 he was a longtime CA resident.

3-week Visit = vacation.

I know the income source rules. He completely moved to NV due to the transfer and performs his work after the transfer 100% in NV .

I just wonder, when a non-resident is issued a CA W-2, what would be the best way to report. I still think 2022 part-year resident and 2023 2024 and 2025 non resident returns would be logical.

HR says because the budget is from the CA branch, the W2 has to show CA, and employee has to take care of the tax reporting. Technically, the nature of the work would not prohibit an employee from perform some work in CA except that Client completely moved to NV - sold the CA house, bought a (bigger) house in NV, registered the car and driver's license in NV etc.

Can't argue with internal policy of the organization, or HR.

I come here for kudos and IRonMaN's jokes.

sjrcpa

Level 15

Then part year CA for 2022.

No nonresident CA taxable income for the 3 week visit/vacation.

The more I know the more I don’t know.

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