Question

California residency

Forum|Forum|6 years ago
August 3, 2019
1 reply
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I am considering taking a job that will involve travel to various sites and offices on the West Coast and states immediately adjacent – basically California, Nevada, Arizona and Oregon. I will have considerable latitude on where to spend my time, but the main office is in Los Angeles, and expect to spend most of my time there by necessity. I will probably get a cheap apartment there. I am currently a resident of Illinois.

It looks like my employment position does not have a truly fixed site – and I can arrange it so that I spend less than six months of the calendar year within the confines of California. I'm keeping my house in Illinois, my wife and kids will remain there, as I expect to transfer back to Illinois within two years. My take on this is that if I don't vote in California, have my main home there, and my family remains in Illinois (where I maintain closer connections) I can take the position that I am a nonresident of California. But I don't see a way to avoid paying California income tax on whatever amount of my overall salary is attributable to days that I work within its borders. So if my salary is $100,000, and I spend 5 1/2 months of the year in California, I should pay state income tax on $55,000. And I would like to pay Illinois income tax on the remaining $45,000. Problem is that by taking this days worked approach, I would probably have to file Arizona and Oregon based on the same "days worked" approach. I'm not trying to save taxes by filing in Illinois – it's tax rate is pretty much the same as Arizona and just a little less than Oregon. But filing in three states is a hassle. Obviously, under this approach I should try to work as much as I can in Nevada, which has no state income tax.

Any thoughts? Do the states agree to respect a reasonable approach like this? Or do they take whatever position gets them the most amount of state income tax.

A

Anonymous

the definition of residency differs from state to state so does part year residency.

Who is an Illinois resident?

You are an Illinois resident if you were domiciled in Illinois for the entire tax year. Your domicile is the place where you reside and the place where you intend to return after temporary absences. Temporary absences may include duty in the U.S. Armed Forces, residence in a foreign country, out-of-state residence as a student, or out-of-state residence during the winter or summer. (your work in other states would not seem to qualify as temporary absences) If you filed a joint federal return and one spouse is an Illinois resident while the other spouse is a nonresident or a part-year resident, you may file separate Illinois returns. If you file a joint Illinois return, you will both be taxed as residents.

so it would seem proper and best for your wife to file a separate Illinois return. you would file part year resident returns for California and Illinois. As to Or and Az , you'll need to read each states definition of resident/part year resident. in some states you must spend a minimum amount of time to be responsible for filing an income tax return or have a minimum amount of income. the key is where you are living when you perform the work.

also will you a 1099-MISC or W-2. a W-2 would break out the wages and withholding for each state.