Question

Paying quarterly estimated state taxes to both Resident state (HI) AND Non-Resident state (CA)(where my work/company is based)?

Forum|Forum|4 years ago
February 10, 2022
1 reply
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Hi all, I live in Hawaii and work with a company based out of California. Due to the nature of my work, state taxes are NOT deducted automatically from my paycheck (yeah, it's a bit weird, it's a standard W-2 with Federal taxes automatically withheld like most other ordinary jobs, but due to the nature of the work, state taxes in this particular line of work are NOT automatically withheld). This means I need to make quarterly estimated state tax payments to Hawaii as a resident BUT, because the company I work for is based out of California, I also need to pay non-resident state taxes to California. How does this work exactly? Do I pay California an estimated non-resident state tax quarterly as well, in addition to the Hawaii estimated quarterly resident state tax? It's supposed to be done all online on both of the state's respective government tax websites, I guess, but how do I coordinate the credits from California's non-resident quarterly taxes to Hawaii's resident quarterly taxes so I am not double taxed if I am doing this on two separate websites with two separate government entities? Even more so, I see no option available on California's FTB website to indicate filing non-resident quarterly estimated state taxes (which I would like to do first to incur the credits to transfer to the subsequent Hawaii resident quarterly state taxes that I would file). I have no idea how this works and would like to avoid making a mistake and having more money unnecessarily tied up by this process than is needed (even if a refund would be issued later on). A walkthrough would be greatly appreciated. Thanks!

T

ThomasM125

If your income in 2022 is similar to your income in 2021, I suggest you make note of your actual tax liability when you file your tax return for 2021 for each state. Then, pay in estimated taxes equal to an amount that will satisfy the tax liability you had in 2021. For the state you have tax withheld in, you will reduce your tax liability by the amounts withheld and pay in the additional tax.

All you need to do then is make estimated tax payments on a quarterly basis to each state in an amount equal to your estimated tax liability for the year, divided by four. The estimated taxes do not have to be identified with a particular tax return, such as non-resident versus resident, you just need to apply them to your individual income tax.

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