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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29941
Experience:  Taxes, Immigration, Labor Relations
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We both work VA and transferred from Texas to California in

Customer Question

We both work for the VA and transferred from Texas to California in 2013. I've paid California state taxes since. My wife was transferred to Las Vegas in Dec 2014. We purchased a home in Vegas shortly before she moved there. In 2015 I purchased a new car and registered it in Nevada. I also got my Nevada drivers license. I drive to L.A. either Sunday eve or early Monday morning. I have a small place on the VA campus where I sleep during the week and return back to Vegas Friday afternoon/eve.
When I was in the Army (23 yrs) I paid state tax to Ohio (where I enlisted) until I was assigned in Texas where I switched my home of residency. My question is: "Do I have to pay California taxes since I'm now a resident of Nevada?" I have nothing that shows me in California. I have no bills in California. I work for the federal government. My W-2 is from the Department of Veterans Affairs.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Do I have to pay California taxes since I'm now a resident of Nevada?

State tax liability is based on both - residency and source of income.
When you are a resident of a specific state - you are subject to income tax on all your worldwide income regardless of its source.

But if you are a nonresident of that state - you are taxed ONLY on income from that state sources.

Expert:  Lev replied 1 year ago.

Thus - if you are a nonresident in California - you are subject to California state income tax ONLY on income from sources within California.

Expert:  Lev replied 1 year ago.

If your workplace is in California - wages or other compensation you receive for these services are from California sources and are subject to California state income tax regardless of your residency.

But other income you might have - for instance - interest in the bank, pension, investment income, unemployment benefits, etc - would not be taxable in California as you are a nonresident there.

Customer: replied 1 year ago.
When I was in the Army I was assigned in various different states. I was paid by the Army in those states, but I never paid state taxes to that state. Why is working for the VA different? Both are federal government agencies. Also, how do I differentiate between work I do in Nevada for the VA and work I do in California? It all comes to me in a single paycheck.
Expert:  Lev replied 1 year ago.

The difference is in determination of the state of residency - that is for military personal - the state of record.

Your state of legal residency (SLR) is your “Home of Record,” unless you changed it to another state.

As a military person - according to the federal law - you are considered a resident of the state from which you entered the military. As you are not a military person - general law stated above will apply.

According to the federal law - the compensation for military service is not considered to be from sources within the state where a member is stationed if that state is not the member’s domicile.

That is a federal law and covers only military personal.

If you are working and your workplace in California - your wages are subject to that state income tax - that compensation is considered from CA sources.

Sorry if you expected differently.

VA employees are not covered by that federal Soldiers’ and Sailors’ Civil Relief Act (50 U.S.C. App. Section 574) of 1940.

Customer: replied 1 year ago.
if I telecommute from Vegas and do work for the VA located in California is that income taxed in California, even though I'm performing that work in Nevada?
Expert:  Lev replied 1 year ago.

As nonresident - you are taxed ONLY on income from sources within that state,.
If your employer agrees to change your workplace to NE - that compensation is not subject to CA income tax.
If you work in different states - for instance in CA and NE as in your situation - your employer is required to keep track of your wages paid in each state - and report correspondingly on W2.

Otherwise - you are correct - wages for services you provide in Vegas are NOT subject to CA income tax - to that is a matter to report your compensation correctly.

Customer: replied 1 year ago.
But for some reason you just aren't getting the point that I'm trying to make. I'm not making the money in California. I'm making it on FEDERAL PROPERTY that does NOT belong to the state of California. I have a CPA telling me that since I'm not resident of CA and I'm not earning money in California because I'm earning it on FEDERAL property I don't need to pay California tax on the money I'm earning from the FEDERAL government on FEDERAL property. Please explain how I owe California taxes when I'm not earning a cent on California property.
Expert:  Lev replied 1 year ago.

The property is located in California - correct?
So your workplace IS in California. Therefore your wages are from California sources.

You state that federal property located in California is not regulated by California law? That is not true statement.
If you were laid off and apply for unemployment benefits - where would you apply? In California?
What state law regulates your employment? California Labor law.
If someone steals your wallet while you at work - who will investigate the incident? Local police.
If someone hits your car on the parking lot at the FEDERAL property - who will prepare the report? Local police.
How your FEDERAL employer reports your wages? What do you see on W2 form box 15? - I bet - it is reported as from California sources.
No need to convince me - I am already on your side.
If you think that your employer reports incorectly - you may file a complain.
But so far - I feel that your position will not be accepted.

Customer: replied 1 year ago.
If I were laid off I don't know what I'd do since it's never happened, but I would assume I'd file in Nevada since that's my home of record and I'm only in California for the federal job. If someone steals my wallet I report it to the FEDERAL VA POLICE, not the California police. If someone hits my car on FEDERAL property I again report it to the FEDERAL VA Police. The FEDERAL employer reports my earnings to my HOME OF RECORD, which is now NEVADA. So again and again, why do I pay California taxes??????
Expert:  Lev replied 1 year ago.

I do not mean specifically you - but any your co-worker.

You would not be able to file for unemployment benefits in Nevada because your employer did not pay unemployment taxes to Nevada. They pay to California. Why? - because the workplace is in California regardless of your residency.

So the only place you may apply - is California.

.

The federal employee reports earning based on the home of record for military personal only.

For civil employees - reporting is based on both - place of employment and residency.

If you think that your place of employment is NOT in California and you are NOT a resident of that state - contact your employee and ask to correct W2 form box 15.

That all you need.