If you lived inside or outside of California during the tax year, you may be a part-year resident.
As a part-year resident, you pay tax on:
- All worldwide income received while a California resident
- Income from California sources while you were a nonresident
Nonresident
A nonresident is a person who is not a resident of California.
Generally, nonresidents are:
- Simply passing through
- Here for a brief rest or vacation
- Here for a short period of time to complete:
- A job
- A transaction
- Contract work
This only applies if you’re domiciled outside of California. Visit Guidelines for Determining Resident Status (FTB Publication 1031) for more information.
Safe harbor
If you’re domiciled in California but are outside of California under an employment-related contract, you may qualify as a nonresident under safe harbor.
Visit FTB Publication 1031 for more information.
Do I need to file?
As a nonresident, you pay tax on your taxable income from California sources.
(Video) Form 540NR California Nonresident or Part Year Resident Income Tax Return
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
As a part-year resident, you pay tax on all worldwide income while you were a resident of California.
Visit the following publications for more information:
- Guidelines for Determining Resident Status (FTB Publication 1031)
- Taxation of Nonresidents and Individuals who Change Residency (FTB Publication 1100)
- Equity-based Compensation Guidelines (FTB Publication 1004)
Leaving California?
Scenario 1:
You relocate to another state and continue to work remotely for a California employer. You periodically travel to and from California in order to perform services for your employer. You receive a W-2 from them. Do you need to file a California return and pay California income tax?
Answer: Yes.
If you are a part-year resident, you pay tax on:
- All worldwide income received while you are a California resident
- Income from California sources while you were a nonresident
During the nonresident portion of the year (or if you are a full-year nonresident), you will have California source income to the extent you physically performed services in California. You will need to file a California Nonresident or Part-Year Resident Income Tax Return (Form 540NR), to report the California sourced portion of your compensation. One way to calculate the portion of your income that is California sourced is to multiply your total amount of income for the year by a ratio of your total number of days performing services in California over your total number of days performing services worldwide.
CA Workdays / Total Workdays = % Ratio
% Ratio x Total Income = CA Sourced Income
(Video) Part-Year Or Nonresident Return
There are special rules for “deferred” or Equity-Based Compensation. Visit FTB Publication 1004 for more information.
Scenario 2:
Similar to Scenario 1, except you perform all of your services outside of California after relocation. Do you need to file a California return and pay California income tax?
Answer: Maybe. Generally, if you are a nonresident and all services were performed outside of California, this would not be California sourced income. However, if you had “deferred” or Equity-Based Compensation, you may still have California sourced income. Visit FTB Publication 1004 for more information.
Scenario 3:
You temporarily relocate to another state for employment purposes, but plan to return, or have returned, to California.
Answer: You may still be considered a resident of California. California residents are taxed on income from all worldwide sources. If you paid tax to another state on this income, you may be entitled to an Other State Tax Credit.
If you’re domiciled in California but are outside of California under an employment-related contract, you may qualify as a nonresident under safe harbor.
Visit FTB Publication 1031 for more information.
Scenario 4:
You are an independent contractor/sole proprietor who relocates to another state. In addition to obtaining customers in your new state you still perform services for California customers who receive the benefit of your services in California. Will you need to file a California return?
Answer: Yes.
(Video) Form IT 203 Nonresident and Part Year Resident Income Tax Return
California source income for independent contractors/sole proprietors is determined by looking to where the benefit of the service is received by the customer. The location where the independent contractor/sole proprietor performs the work is not a factor. Visit Market-based sourcing for independent contractors for more information.
Filing requirements
If your income is more than the amount shown in any of the tables below, you need to file a tax return.
Match your filing status, age, and number of dependents with the 2021 tax year tables below.
For previous year tables, visit that year’s tax booklet.
Total gross income (worldwide)
Single or head of household
| Age as of December 31, 2021* | 0 dependents | 1 dependent | 2 or more dependents |
|---|---|---|---|
| Under 65 | $19,310 | $32,643 | $42,643 |
| 65 or older | $25,760 | $35,760 | $43,760 |
Married/RDP filing jointly or separately
| Age as of December 31, 2021* | 0 dependents | 1 dependent | 2 or more dependents |
|---|---|---|---|
| Both are under 65 | $38,624 | $51,957 | $61,957 |
| One spouse/RDP is 65 or older | $45,074 | $55,074 | $63,074 |
| Both are 65 or older | $51,524 | $61,524 | $69,524 |
Qualifying widow(er)
| Age as of December 31, 2021* | 0 dependents | 1 dependent | 2 or more dependents |
|---|---|---|---|
| Under 65 | N/A | $32,643 | $42,643 |
| 65 or older | N/A | $35,760 | $43,760 |
* If your 65th birthday is on January 1, 2022, you are considered to be age 65 on December 31, 2021. ↵Return to first table table under the header total gross income (worldwide)
California adjusted gross income
Single or head of household
| Age as of December 31, 2021* | 0 dependents | 1 dependent | 2 or more dependents |
|---|---|---|---|
| Under 65 | $15,448 | $28,781 | $38,781 |
| 65 or older | $21,898 | $31,898 | $39,898 |
Married/RDP filing jointly or separately
| Age as of December 31, 2021* | 0 dependents | 1 dependent | 2 or more dependents |
|---|---|---|---|
| Both are under 65 | $30,901 | $44,234 | $54,234 |
| One spouse/RDP is 65 or older | $37,351 | $47,351 | $55,351 |
| Both are 65 or older | $43,801 | $53,801 | $61.801 |
Qualifying widow(er)
| Age as of December 31, 2021* | 0 dependents | 1 dependent | 2 or more dependents |
|---|---|---|---|
| Under 65 | N/A | $28,781 | $38,781 |
| 65 or older | N/A | $31,898 | $39,898 |
* If your 65th birthday is on January 1, 2022, you are considered to be age 65 on December 31, 2021. ↵Return to first table under the header California adjusted gross income
Dependent filing requirement
If you can be claimed as a dependent on another person’s tax return, you have a different standard deduction. It cannot be more than the normal standard deduction. Your standard deduction is the larger of:
(Video) Non-Resident Landlord Tax
- Your earned income plus $350, or
- $1,100 for the taxable year
California method for computing tax
California uses its own method for calculating the tax of part-year residents and nonresidents.
Visit Taxation of Nonresidents and Individuals who Change Residency (FTB Publication 1100) for more information.
What form to file
Nonresidents or part-year residents with a filing requirement must file:
- Nonresidents or Part-Year Residents (540NR)
Visit 540NR Booklet for more information.
A nonresident return is required when a resident spouse and a nonresident spouse wish to file a joint return.
Withholding
Withholding is tax previously withheld from your income. Visit Withholding on nonresidents for more information.
Deductions
Deductions are certain expenses which may reduce your taxable income. Visit Deductions for more information.
Other state tax credit (OSTC)
If you paid taxes to both California and another state, you may be entitled to an OSTC. Visit Other state tax credit for more information.
Community property
California is a community property state. If one spouse is a resident of California and the other is a nonresident, then the California:
(Video) Tax Implications – Resident vs Non-Residents
- Resident may be required to report income earned outside of California.
- Nonresident may be required to report income earned by the resident spouse.
Visit Guidelines for Determining Residency Status (FTB Publication 1031) for more information.
Don’t confuse part-year residency with nonresidency. Part-year residents are usually those who actually lived in the state for a portion of the year, although there are some exceptions to this rule. A nonresident simply made income in the state without maintaining a home there.
What does resident and nonresident mean? ›
If you are not a U.S. citizen, you are considered a nonresident of the United States for U.S. tax purposes unless you meet one of two tests. You are a resident of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1 – December 31).
What is a CA part-year resident? ›
If you lived inside or outside of California during the tax year, you may be a part-year resident. As a part-year resident, you pay tax on: All worldwide income received while a California resident. Income from California sources while you were a nonresident.
How are California part-year residents taxed? ›
Part-year resident status rules
If you’re a part-year resident, you pay California state tax on all income you received during the part of the tax year you were a resident of California, plus state income tax on income just from California sources while you were a nonresident.
What is the 183 day rule for residency? ›
The “183-Day Rule” in Canadian Tax Residency
The 183-day rule refers to people who “sojourn” in Canada for more than 183 days in a year. Where this is the case, they are deemed to be a Canadian resident for tax purposes throughout the whole year.
Can you be a resident of 2 states? ›
Legally, you can have multiple residences in multiple states, but only one domicile. You must be physically in the same state as your domicile most of the year, and able to prove the domicile is your principal residence, “true home” or “place you return to.”
Videos
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