Calif. state tax question

File a CA form 540NR.

You have California source income arising from this activity. You need to file a nonresident return (Form 540NR, as Stussy says) to calculate the tax, and claim credit for the tax that was withheld.

Usually, when one is a resident of one state and has income from a source in another state, the residence state allows credit for the tax paid to the source state, so that, net, one pays state income tax on that income at the higher of the two states' average rates for the taxpayer's filing status, income level, number of dependents, etc. Oregon and California, however, stand in a reverse relationship whereby the source state allows credit for the tax paid to the residence state. When you prepare your 540NR, include Schedule S to claim credit against the California tax for the tax you paid to Oregon on that income. You may not get all of the withholding back, but you'll probably get most of it.

Katie in San Diego

Katie,

Do you have and can make available or do you know where one might find a list of states that have the reverse relationship you mention in your post?

On a related manner, there is a list of states that have reciprocal agreements with each other at

snip

at

I believe these are all current, although I haven't checked in a while.

CA allows credit to residents of AZ, OR, IN, VA, and Guam. AZ allows credit to residents of CA, OR, IN, VA, and DC. OR allows credit to residents of AZ, CA, IN, and VA. IN allows credit to residents of AZ, CA, OR, and DC. VA allows credit to residents of AZ, CA, OR, and DC. And I presume, although I don't know for sure, that Guam allows credit to residents of California.

Katie in San Diego

Why would someone living in another State or a foreign country not terminate their CA residency - other than a temporary move or a MFJ return?

Dick