We are an older couple who split our time between CA and FL. We have a small business in FL that is remotely run when we are not in FL. We had this business for a few years now. We also have some rental commercial properties in FL. The plan is to eventually move to FL.
FL has no state income tax but CA does.
Can we get some relief from CA State income taxes for the months we spend in FL during the year?
If yes, how do we go about accomplishing this?
Thank you.
Not likely. As long as you maintain a CA residence, CA will try to treat you as a resident for income tax purposes and tax your entire income. The only way to break free of CA income tax is to incontrovertibly establish FL residency. See FTB Pub. 1031 for the guidelines to determining residency status.
Ira Smilovitz, EA
No. If you are a California resident, you owe tax on all of your income, no matter where you happened to be when you earned it.
If you spend more time in Florida than in California, you might be able to claim that you are a Florida resident, in which case you'd owe California non-resident tax for your California income. But the California Franchise Tax Board is very aggressive, and if you spend more than three months of the year in California it is unlikely you can win a residency argument against them.
I recommend you move out of CA permanently for several years, don't even set foot in CA, and do all the things needed to preclude the greedy CA government from asserting that you are still a CA resident (get rid of your CA doctors, dentists, bank accounts, etc.). They come to visit CA (if you MUST!) for brief periods of time.
This may help you start your planning:
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