I worked remotely for a CA company during Jan 2023- May 2023, and lived in another state whole year. I had a business trip to this company in CA for 3 days, and a vacation to CA for 7 days during this period.I understand that I need to pay CA state tax for 3 days business trip in CA, but do I pay CA state tax for vacation in CA?How do I get the amount for the question "How much did you earn in California?"For the number of days mentioned above, I counted the number of nights I stayed in CA, including weekends nights, even I didn't work during weekends, is this correct? Should I exclude weekends nights?I had other business trips to CA in the rest of 2023 during which my work location has been changed to my home state on my payroll, so I don't need to provide these trips infos on CA state return, right?Thanks!

Thank you @Vanessa A . Your reply seems different from @AmyC. So in your example, if my company headquarter is in KY all the time, and I had business trips in CA about 15 days in total (before and after May), and I am on salary, no special extra income for the activity in CA, I still need to pay CA state tax for the ratio 15/365 of my total income (inside and outside CA)? As @AmyC said, what do you actually do when you are in CA? Are you meeting with clients or are you just meeting a coworker for lunch planning when to meet a client? Are you going to the CA site to work? Are you making money for your employer while you are there? Why are you going to CA? Here are the CA rules"As a nonresident, you pay tax on your taxable income from California sources.Sourced income includes, but is not limited to: Services performed in California Rent from real property located in California The sale or transfer of real California property Income from a California business, trade or profession" If you are there just to meet with coworkers, but you do not actually make any money for your company while you are there, then you would not be "working" in CA. However, if you are meeting with clients, setting up deals, servicing components, etc, this would be considered CA source income and you would need to file a CA Nonresident return. "Service" means a commodity consisting of activities engaged in by a person for another person for consideration. The term "service" does not include activities performed by a person who is not in a regular trade or business offering its services to the public, and does not include services rendered to another member of the taxpayer's combined reporting group as defined in Regulation section 25106.5(b)(3). Cal. Code Regs. Tit. 18, § 25136-2 - Sales Factor. Sales Other than Sales of Tangible Personal Property in this State

I understand that I need to pay CA state tax for 3 days business trip in CA, but do I pay CA state tax for vacation in CA? Yes, any days spent working IN CA would be income taxable to CA. So if your business trip/vacation were all together, then the days you actually worked would be taxable. If you were on vacation and not working, then those days would not be counted for anything. How do I get the amount for the question "How much did you earn in California?" The amount you earned in CA would be calculated by taking your daily pay multiplied by the number of days you worked in CA. If you are salary, then you would divide your total salary for the year by the total number of days you worked during the year and then multiply that by the number of days you actually performed work in CA, even if your employer did not list CA as your work location. For the number of days mentioned above, I counted the number of nights I stayed in CA, including weekends nights, even I didn't work during weekends, is this correct? Should I exclude weekends nights? You would only count the actual DAYS you worked. You would not count weekends or days you did not work. I had other business trips to CA in the rest of 2023 during which my work location has been changed to my home state on my payroll, so I don't need to provide these trips infos on CA state return, right? This does NOT change the taxability of the income. If you were physically present performing a service (business trip) in the state of CA, whether or not your employer withheld taxes for CA or what they indicated your work location to be, you would be liable for taxes in CA.However, depending on how much you earned, you may not have to file a CA return at all. As they do have deductions and exemptions that may cause you to have $0 CA wages. The best thing to do is walk through the CA return to see if you actually need to file or not.

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User123120

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I worked remotely for a CA company during Jan 2023- May 2023, Do I need to pay CA state tax for my 7 days vacation in CA?

Forum|Forum|2 years ago
February 11, 2024
1 reply
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I worked remotely for a CA company during Jan 2023- May 2023, and lived in another state whole year. I had a business trip to this company in CA for 3 days, and a vacation to CA for 7 days during this period.

I understand that I need to pay CA state tax for 3 days business trip in CA, but do I pay CA state tax for vacation in CA?
How do I get the amount for the question "How much did you earn in California?"
For the number of days mentioned above, I counted the number of nights I stayed in CA, including weekends nights, even I didn't work during weekends, is this correct? Should I exclude weekends nights?
I had other business trips to CA in the rest of 2023 during which my work location has been changed to my home state on my payroll, so I don't need to provide these trips infos on CA state return, right?

Thanks!

Best answer by Vanessa A

Thank you @Vanessa A . Your reply seems different from @AmyC. So in your example, if my company headquarter is in KY all the time, and I had business trips in CA about 15 days in total (before and after May), and I am on salary, no special extra income for the activity in CA, I still need to pay CA state tax for the ratio 15/365 of my total income (inside and outside CA)?

As @AmyC said, what do you actually do when you are in CA? Are you meeting with clients or are you just meeting a coworker for lunch planning when to meet a client? Are you going to the CA site to work? Are you making money for your employer while you are there? Why are you going to CA?

Here are the CA rules

"As a nonresident, you pay tax on your taxable income from California sources.

Sourced income includes, but is not limited to:

Services performed in California
Rent from real property located in California
The sale or transfer of real California property
Income from a California business, trade or profession"

If you are there just to meet with coworkers, but you do not actually make any money for your company while you are there, then you would not be "working" in CA. However, if you are meeting with clients, setting up deals, servicing components, etc, this would be considered CA source income and you would need to file a CA Nonresident return.

"Service" means a commodity consisting of activities engaged in by a person for another person for consideration. The term "service" does not include activities performed by a person who is not in a regular trade or business offering its services to the public, and does not include services rendered to another member of the taxpayer's combined reporting group as defined in Regulation section 25106.5(b)(3). Cal. Code Regs. Tit. 18, § 25136-2 - Sales Factor. Sales Other than Sales of Tangible Personal Property in this State

Vanessa A

I understand that I need to pay CA state tax for 3 days business trip in CA, but do I pay CA state tax for vacation in CA? Yes, any days spent working IN CA would be income taxable to CA. So if your business trip/vacation were all together, then the days you actually worked would be taxable. If you were on vacation and not working, then those days would not be counted for anything.
How do I get the amount for the question "How much did you earn in California?" The amount you earned in CA would be calculated by taking your daily pay multiplied by the number of days you worked in CA. If you are salary, then you would divide your total salary for the year by the total number of days you worked during the year and then multiply that by the number of days you actually performed work in CA, even if your employer did not list CA as your work location.
For the number of days mentioned above, I counted the number of nights I stayed in CA, including weekends nights, even I didn't work during weekends, is this correct? Should I exclude weekends nights? You would only count the actual DAYS you worked. You would not count weekends or days you did not work.
I had other business trips to CA in the rest of 2023 during which my work location has been changed to my home state on my payroll, so I don't need to provide these trips infos on CA state return, right? This does NOT change the taxability of the income. If you were physically present performing a service (business trip) in the state of CA, whether or not your employer withheld taxes for CA or what they indicated your work location to be, you would be liable for taxes in CA.

However, depending on how much you earned, you may not have to file a CA return at all. As they do have deductions and exemptions that may cause you to have $0 CA wages. The best thing to do is walk through the CA return to see if you actually need to file or not.

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User123120Author

Thank you for your replies!

If my company is NOT a CA company, it just has a CA branch, and I worked in another state. My payroll location was at this CA branch before May, but changed to my current state after May. And I had a few short business trips to this CA branch before and after May. Do I need to pay CA income tax for my trips to this CA branch after May? Thank you for your help!

AmyC

Employee

You will not be double taxed on the same state income, that is illegal since 2015. One state will give a credit for tax paid to the other state. Who gives the credit depends on the states and their agreement. If you would like to reply with the other state, we can share more information.

The 2023 Instructions for Schedule CA (540NR) states:

California nonresident amounts – Enter the total amount of profits or losses (including losses allowed from passive activities) from all businesses sourced to California while a nonresident of California. California uses a mandatory market assignment method and single-sales factor apportionment to apportion business income to California. A nonresident may have California sourced income or apportionable business income if receiving income from intangibles or services from California sources.

If, as a nonresident, you derived income from a business, trade, or profession conducted partly within California and partly outside California, only income from the part conducted within California is considered California source income that you must report in column E. If there is any business relationship between the parts within and outside California (flow of goods, etc.), apportion the gross income or loss from the entire business. To determine the portion of income or loss from businesses engaged in multistate activities that you must report, use the apportionment formula described in Schedule R, Apportionment and Allocation of Income.

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