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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28096
Experience:  Taxes, Immigration, Labor Relations
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how to file part year california return. all wages were earned

Resolved Question:

how to file part year california return. all wages were earned in another state (AZ) on which i paid AZ income tax
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

LEV :

Hi and welcome to Just Answer!

LEV :

Did you move from AZ to CA during the year?

Customer:

yes

LEV :

You will use this form - http://www.ftb.ca.gov/forms/2010/10_540nrca.pdf and adjust your wages to zero if all received before moving to California.

LEV :

Your California tax liability will be determined only on income from California sources. If all your income earned before moving to California - you will not have any tax liability for California.

LEV :

Please let me know if you need any help or clarification.

LEV :

Please stay with me - I will answer all your questions.

Lev and 2 other Tax Specialists are ready to help you
Customer: replied 5 years ago.
i seem to have ended the chat accidentally
Expert:  Lev replied 5 years ago.

You will use this form - http://www.ftb.ca.gov/forms/2010/10_540nrca.pdf and adjust your wages to zero if all received before moving to California.

Your California tax liability will be determined only on income from California sources. If all your income earned before moving to California - you will not have any tax liability for California.

Please let me know if you need any help or clarification.

Please stay with me - I will answer all your questions.

Customer: replied 5 years ago.
yes, i used that form. however, while resident of ca, i still earned 35K of income from "sources in AZ". i entered it on part ii line 7 e. so i earned it while a resident of CA, so it's reportable to ca, but FROM sources in AZ, so its also reportable to AZ
Expert:  Lev replied 5 years ago.
That is correct - the same income is taxable for both states - you need to claim a credit for taxes paid to AZ attributable for that income. Here is the form - http://www.ftb.ca.gov/forms/2010/10_540s.pdf
Customer: replied 5 years ago.
Yes, I interpretted it the same way. we are on the same page so far. i also got ca schedule s and filled it in. but i am not sure i completed it correctly. my result seems wrong. can i continue?
Expert:  Lev replied 5 years ago.
What exactly do you think is wrong?
Customer: replied 5 years ago.
On Schedule S, my line 2 was about 2k, my line 3 was 35k and line 4 was 34 k. in other words, other than the double taxed income, i ran a net negative in ca. so it would seem i shouldn't owe CA any tax after the credit from schedule s. but this in turn depends upon the amount i insert on line 7. how do i calculate the line 7 amount?
Expert:  Lev replied 5 years ago.
If your California adjusted gross income is $34,000 - your Double-taxed income taxable by California may not be $35,000 - it should be $34,000.
Customer: replied 5 years ago.
That isn't the issue i think. the issue is i should somehow end up with line 12 showing 2k to entirely cancel my CA tax. but that depends on, as i said, line 7. how do i calculate the line 7 amount? the instructions are unclear.
Expert:  Lev replied 5 years ago.

California tax rates are higher than in Arizona - so it is normal that you have to pay additional taxes to California.

Customer: replied 5 years ago.
i still don't think that is correct. As you wrote at the top of this chat: Your California tax liability will be determined only on income from California sources. i had virtually no income exclusively from CA. I won't "accept answer" unless you answer my question. For the third time: how do i calculate the line 7 amount on schedule S?
Expert:  Lev replied 5 years ago.

Your California tax liability will be determined only on income from California sources - that is correct - but that doesn't mean your other income simply ignored - to determine which tax rate to use - all your income is considered.

On the line 7 schedule S is the amount of taxes paid to AZ from AZ tax return.

You do not calculate it - just take from AZ tax return.

Customer: replied 5 years ago.
The FULL AMOUNT of my tax liability to AZ? I.e. the TOTAL of what I owe AZ? Are you sure? That seems too HIGH. But if I use it, indeed, it brings my CA to zero.
Expert:  Lev replied 5 years ago.

Yes - line 7 total tax liability to AZ

line 8 - Double-taxed income - $34,000

line 9 - Adjusted gross income from AZ tax return

line 10 = (line 8) / (line 9)

line 11 = (line 7) * (line 10) - that is your AZ tax liability on Double-taxed income.

Line 12 is the smaller of (line 11) or CA taxes on Double-taxed income from line 6

Lev and 2 other Tax Specialists are ready to help you