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I live in Illinois, I work for a consulting company. 1/3 of

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I live in Illinois, I...
I live in Illinois, I work for a consulting company. 1/3 of the year I will have been physically working in California (8 days a month), the other 2/3 I will be working in Illinois. I am not paid by a California company I am paid by my company based in IL. What is my California state tax liability, 100% of my income? 33%?
Submitted: 5 years ago.Category: Tax
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6/1/2012
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,888
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello and thank you for using Just Answer
You will be considered as a Nonresident of California and you will need to file a nonresident return reporting all the potion of the income that you earn in CA.

Nonresidents must file a return if they have any California source income and their income from all sources is more than the filing requirement amounts for residents.

Please let me know if you need clarification.

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Customer reply replied 5 years ago
I know I will need to file a non resident return the real question is for what amount, which you really did not answer.

I am not personally receiving any payment from a CA company. I am paid by my consulting company here in Illinois.

Are you saying I am liable for California tax for 100% of my income, or only the income I earned while in California? Or am I not liable for any California tax since no California company paid me?
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago

The portion you receive for the work in CA is the amount that will be taxable to CA. If you earn total $100,000 from all work everywhere and of that $33,000 was earned because of your work in CA, then $33,000 is what is taxable to CA. Now Illinois will tax you on all of it and you can get a credit for the taxes paid to CA on your Illinois return.
Nonresidents must look to total income from all work just to see if they have earned enough that they have to file a return but just the CA portion is taxable to CA.

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Customer reply replied 5 years ago
The California tax documents make frequent reference to being paid by a California company, you are saying that the company that pays me is not relavant nor is the location I am at when I do the work.

The only releavant factor is that the work was done for a California company so it goes to reason then if I worked remotely for a California company and was paid exclusely by an Illinois company I would be liable for 100% of my income to California even though I never was in California nor was I ever paid by a California company?
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago
If you worked in CA. That means you came to their state and performed a service then you earned income in CA. If it was an amount that was enough to require you to file a return then you must do so. Now, if you worked remotely, meaning you were never in CA and you stayed in Illinois then you would have no tax requirement to CA because you did not go to CA to earn the income. It is not enough that a CA company is the end receiver of your services, it is more important where you actually and physically performed the service.
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Customer reply replied 5 years ago
OK now we are getting somewhere.

Since I was physically in California only 1/3 of the time performing "services" would it go to figure I was liable for CA tax for the time worked in CA and liable for Illinos tax for the time I worked in Illinois regardless of the payee (Which was always an IL payee)?

Then I assume I would file my IL tax return and claim only 2/3 of the income listed on my W2 (and get a refund) and file a non resident CA return and list my CA income as 1/3 of my W2 income and pay that in full at that time. Is that correct?
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago

No, as I advised you earlier, Illinois will tax you on all income because you are a resident of Illinois. Ca will tax you only on portion you earned while actually in CA. Illinois will allow you a credit for the taxes paid to CA on the CA portion.

 

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,888
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D. and 87 other Tax Specialists are ready to help you
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Customer reply replied 5 years ago
OK thanks for the verification, I hope I didn't drag it out too long for the $39.
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago

Not at all. I would rather you understand the situation fully then have a quick interaction.

Best wishes and thank you again.

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