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Question for the Money Doctors

Question submitted on Sep 27, 2012.

Question

I have lived in the UK for 7 years. I don''t know when I will return to the US. When I do it may not be to return to CA. I have been filing federal taxes. Do I have to pay CA state tax as well?

Answer

You only pay California tax if you are a California resident or if you are a California non-resident, only if you receive income sourced to California.

If you live in the UK, there should be no state tax unless you earn income from that state. For example if you own rental property in California, you will be required to file a tax return. If you own an interest in a partnership that has income from California will have a CA tax filing requirement. If you have business income from CA, you will need to pay CA tax on that income.

However, if you have stock options that were earned when you were in CA, you may owe CA tax on those stock options even if you exercise them outside of CA.

If your only income is earned in the UK, then there should be no state tax. You should review your situation with a CPA in CA to make sure you do have a tax filing requirement in CA. The rules can get complicated if you own property in CA. Visit www.findacpapfs.com to get a listing of CPA/PFS in your area.


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