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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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My C-Corporation is incorporated in Georgia. My clients

Resolved Question:

My C-Corporation is incorporated in Georgia.

My client's headquarters are in California. They compelled me to register my corporation as a foreign corporation in California to avoid withholding tax.

From 5/14/13 to 7/6/13 I worked at their Georgia Location.

On 6/1/13 I relocated to California and continued commuting to work at their Georgia location until 7/6/13.

On July 21st I resumed work in the same client, commuting to their Montreal location.

I pay myself a fixed monthly salary, irrespective of C-corporation revenue.

Given the above, where do I personally reside from state tax withholding viewpoint?
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Hello, and welcome. Thanks for your question. My name is XXXXX XXXXX I will be happy to help you tonight

Megan C :

You are a resident for tax purposes where you are domiciled. Where is "home" - where do you go back to when you are not working

Megan C :

When you say you "relocated" to California, that tells me that you put up residence there. Even though you commuted to Georgia, that was for temporary purposes.

Megan C :

Your home is still California, and you will be considered a California resident for state withholding purposes.

Megan C :

Do you have any questions about this matter?

Megan C :

If not, please rate me positive so that I may receive credit for assisting you today

Expert:  Megan C replied 2 years ago.
Hans,

I see we had difficulty with chat mode. I am copying my response below, for your review. If you have questions, please reply. Otherwise, please rate positive so that I may receive credit for assisting you today.
Expert:  Megan C replied 2 years ago.

Megan C :

Hello, and welcome. Thanks for your question. My name is XXXXX XXXXX I will be happy to help you tonight

Megan C :

You are a resident for tax purposes where you are domiciled. Where is "home" - where do you go back to when you are not working

Megan C :

When you say you "relocated" to California, that tells me that you put up residence there. Even though you commuted to Georgia, that was for temporary purposes.

Megan C :

Your home is still California, and you will be considered a California resident for state withholding purposes.

Megan C :

Do you have any questions about this matter?

Megan C :

If not, please rate me positive so that I may receive credit for assisting you today

Customer: replied 2 years ago.

Megan C :


You are a resident for tax purposes where you are domiciled. Where is "home" - where do you go back to when you are not working


 


Hans: This looks like you may be asking me a question. Or is it a question that I should ask myself to determine my tax domicile. If the latter, then OK, it is California since June 1st.


 


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Megan C :


When you say you "relocated" to California, that tells me that you put up residence there. Even though you commuted to Georgia, that was for temporary purposes.


 


Hans: "Temporary purposes". I commuted to Georgie every week, and now commute to Montreal every week. Not sure what you mean by "temporary purposes" here?


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Furthermore, does that mean that Georgia is not entitled to payroll tax while I live in California, even though I commute and work in Georgia? If so, why did California want to withhold tax when the situation was reversed, i.e. I lived in Georgia and commuted to California? (Which was the case from August 2012 to May 2013). I.e. Is it then correct that for August 2012 to May 2013, when I lived in Georgia and commuted to California, that only Georgie state tax was withheld?


 

Expert:  Megan C replied 2 years ago.
Hans,

I was asking you to ask yourself where you return to after you are done working.

Temporary purposes - traveling to work somewhere a week is temporary, even if you continue commuting a week at a time for several months. In the end, you intend on going back to California. That's "home" --hope this makes sense.

Please let me know if you need anything additional. If not, please rate positive so that I may receive credit for assisting you today
Customer: replied 2 years ago.

Please review my last paragraph above and answer/confirm.

Expert:  Megan C replied 2 years ago.
Hans,

While you are working in Georgia, you will still owe them tax, but you are only liable for taxes on income generated there or earned while you were a resident of there. On your California tax return, you will get credit for taxes paid to Georgia. This will eliminate some of the double tax impacts.

Please let me know if you need anything additional. If not, please rate positive so that I may receive credit for assisting you today.
Customer: replied 2 years ago.

Please confirm that I was correct in the period August 2012 to May 2013 when I lived in Georgia and worked in California when I only deducted Georgia state payroll tax and not Californian?


 


Also, as a matter of interest, if the above is correct, why did the Californian state force my c-corp, through my client, to register in California otherwise my client would have to withhold state tax?


 

Expert:  Megan C replied 2 years ago.
You are fine only deducting Georgia payroll tax. You will simply pay your California tax when you file your tax return. There's no issue there.

Also, I think that California must have a rule that you have to be registered with the state to do business in the state - it ensures that you will pay tax there. They want to avoid people having corporations in bordering states, working in California, and not paying tax.

Please let me know if you need anything additional. If not, please rate positive so that I may receive credit for assisting today.
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