Articles Tagged with Residency Guidelines

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2982476-300x225Let’s go over the basics of California residency taxation.  They can be brutal.

How Residents and Nonresidents Are Taxed

California residents are subject to California state income tax on all income regardless where earned.  It doesn’t matter what or where the source.  If a California resident derives income from investments in Saudi Arabia or from pensions that accrued while working in Ohio, California will tax that income.  The resident may get a credit for payment of taxes on income earned in other states or other countries (if a tax treaty permits), but the default rule is, the income is subject to California income tax. With a rate that is currently the highest in the nation (the distinction tends to go back and forth with New York), California residency comes with a significant tax impact.