18.F. If I have an employment pension as a California resident and retire from the state, can California tax my pension distributions? 14.F. I am a professional actor who was hired in California for long periods of time, does that make me a resident? A. Technically, you could vacation in California year-round, if you could afford it, and not become a resident, although this is not recommended from a residency perspective. If your stay in California is really for vacation purposes, then it`s temporary and temporary, and therefore not a permanent move. The purpose of a visit to California determines how it affects your residency status, not the weather itself. That is, the longer the holiday lasts, the less it looks like a vacation and the more it feels like a permanent move. From a residency perspective, it`s hard to justify a California « vacation » that lasts longer than the time you spend in your home state in the same tax year, except in unusual circumstances (a rock star who takes an entire year to party in a rented beach house in Malibu?). Also note the nine-month guess discussed above, which is extremely difficult to overcome. One.
Like the professional actor or executive, with careful planning, you can avoid being considered a resident. Your income to work in California is taxed by California, but income in other states is not. To achieve this result, you must keep your contacts out of state and not take any action that would otherwise confer residency. One. The « temporary and temporary » rule applies inversely in this situation. If you are a California resident, you remain a resident unless you leave the country permanently or indefinitely. If you leave for temporary or temporary purposes, you will still be taxed as a resident. Whether taking an out-of-state job is just a temporary move is determined by many factors. There is a safe harbor rule that requires 546 consecutive days (18 months) to work out of state.
However, it has many qualifiers. Financial independence is not a factor in determining residency if you are a student who is financially dependent on a California resident parent who meets the university`s requirements for residency for study purposes (one year of physical presence with the intention of remaining in the state). Please note that both parents must be present in California if your parents are not separated or permanently divorced. The term « California resident » for educational purposes may differ from other definitions of California residency. A person holding a California driver`s license/vehicle registration or residing in California for tax, optional, or social purposes may have legal residence in the state, but is not necessarily considered a resident for state study purposes. One. If you plan carefully, you should not be considered a California resident. You`ll be taxed on W-2 income related to your California work (and most actors use a loan company that includes W-2 salaries), but your income from sources outside California shouldn`t be taxed by the state.
However, in order not to be audited, it is important to have a temporary work plan in California. 6.Q. What if I live in California and leave California to work in another state or abroad, but plan to return after a while? To become a California resident, you must move to the state and live there at least 9 months a year. If you do not yet have permanent legal residency, you can provide proof of residency with utility bills, insurance documents, or voter registration. To get a new driver`s license, go in person to a DMV with some sort of ID within 10 days of moving to California. While you`re at the DMV, you can also transfer your registration document if you`ve already completed your car`s emissions test. For tips on how to apply for residency status at your university, read on! You must prove your intention to make California your home by severing your residential relationship with your former state of residence and establishing those ties to California. If these steps are delayed, the one-year term will be extended until you have demonstrated your presence and intention for an entire year. 13.F.
I don`t live in California, but the company I work for has a department here that I`m supposed to lead. Does that make me a resident? One. It`s possible. W-2 wages for work done in California generate income from « California sources » that is taxed by California, whether you are a resident or non-resident. There is no de minimis rule that exempts work from tax while vacationing in California. The real question is whether your communication with your company during the holidays really constitutes work: the duties that an owner or employee assumes for a fee. This requires detailed analysis. And there are ways around the problem with careful planning and drafting of agreements.
See our article « Working on Vacation: The Dangers of California Source Rules for Non-Residents. » 16.F. I`m a professional athlete playing for a California team, but my home is in another state. Am I a California resident? 10.Q. Can I keep my car in my holiday home all year round? It`s convenient to use it when I come to California on vacation. A. Certainly not. The case law is clear: non-residents who attempt to postpone the date of their permanent move to California by storing their furniture and furnishings in California run the risk of being considered residents. When it comes to delaying the move to California until a business or other asset is sold in a low-tax state, this can be a costly mistake because California claims the transaction is taxable because you were a resident before the sale. One. A stay in California indefinitely usually leads to California residency. For this reason, professional actors who do not want to become California residents but want to look for work in the California entertainment industry must plan carefully so that the audition or job search period is not unlimited, but is subject to a business plan with a certain period of time. If a student first comes to CSU as a first year or as a transfer, the student must have the legal capacity to establish residency.
If a student is under 19 years of age, he or she cannot establish a residence himself/herself; Their status depends on where the parents or guardians live. A. Yes. Spouses may have separate resident status. However, this requires careful planning, as in most cases, you will be spending a lot of time with your spouse in California. It`s important to limit all other contact, as a spouse in California carries a lot of weight when determining residency status. In addition, a careful tax analysis is necessary if you live in a community ownership state or have a prenuptial agreement that converts separate income into community property. If you do, California law requires your spouse to report half of your income on their California resident tax return (Form 540), and you must report half of your spouse`s income on a non-California resident tax return (Form 540NR), which is likely California income. This means that tax savings can be limited by a separate residence. See our article « Married to Residents: Nonresidents with California Spouses. » Note: This requirement makes it extremely difficult for most students who do not have a parent living in California to qualify for classification as a UC campus resident.
This includes students transferring from community colleges and other post-secondary schools in California. Recent amendments to the California Code of Regulations, Title 5, Section 41908, Residency Appeal Process identify the content that must be included in correspondence and communications regarding the determination of residence for non-residents for consideration on or after June 15, 2017.