Have a Tax Question? Ask a Tax Expert
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.I am not sure why your company would force you to file as a resident.
Safe harbor is available for certain individuals leaving California under employment-related contracts . The safeharbor provides that an individual domiciled in California who is outside California under an employment-relatedcontract for an uninterrupted period of at least 546 consecutive days will be considered a nonresident unlessany of the following is met:
The individual has intangible income exceeding $200,000 in any taxable year during which the employment-related contract is in effect.
The principal purpose of the absence from California is to avoid personal income tax.
Here is a good example from the CA FTB
Example –You are a California resident . Youtransferred to your employer’s Germany office for a twoyear work assignment . You visited California for a threeweek vacation . Under the safe harbor rule, you were anonresident of California for the two years you were inGermany . Your three-week visit to California is consideredtemporary
If you established residency in another state prior to leaving then you would be a resident of that state and would need to check on their requirements too for filing.
Thank you, XXXXX XXXXX I go back and amend returns and receive the state taxes paid?
You could but you should really file correctly in the beginning.
I do not have that choice, as the company files on my behalf.
They are doing "hypothetical tax"
Oh so you are in an agreement for gross up or down on the taxes in Japan and the US
Yes, correct - I do not pay taxes on extra benefits that I receive - I end up paying the same amount of taxes as had I stayed in California.
Make sure you check your agreement to see that there is no clause for amending
ok great; as long as there is no clause then I should be able to amend? is it very likely california would be willing to accept such an amendment and if so is there a specific type of tax return advisor that I should be looking for to assist?
The 540X can be completed by you or a tax preparer. You can amend with in 3 years of teh filing due date
ok great, thank you
You are most welcome.
Your positive rating is always thanks enough.