To summarize, working remotely for a California firm as a nonresident has the potential for significant tax savings, but there are important caveats. First, the entire favorable tax treatment of working remotely is based on the assumption that the employee is truly a legal nonresident.
Where to live and work in Southern California?
Live and work for a family owned business located at 9,373 ft in the stunning Eastern Sierra! California’s outdoor spaces need your help! Join an ACE Conservation Crew this summer!
Do you have to be in California to work in California?
And as a practical matter, it’s very rare for any remote worker not to have to make some visits to California to perform work while physically present in the state. The more time spend in state, the more tax is at issue, and the more pressing the need for dealing with duty days in the employment agreement.
Can you live in one state and work in another?
With the rise of the internet, cloud and smart phone economy, more and more people have the option of living in one state while working in another – remotely. The possibilities for reducing state income taxes through this scenario haven’t been lost on savvy hi-tech employees and business owners in California.
What happens if you work in one state and work remotely from another?
If you were working remotely from one state in 2020 and your employer was in another, you could be in for a big state tax bill. Say you were among those who rode out the pandemic in a different state from your own — for example, at a vacation home or your parent’s house.
Do you have to file a state tax return if you work remotely?
That means, if you’re working remotely you’ll only have to file a resident tax return to the state you live in. However, if your W-2 form (that form you receive at the end of the year or beginning of January) lists a state other than your resident state, then you’ll need to also file a non-resident tax return to the state listed.
Do you have to be a California resident to work in California?
Specifically, even if the independent contractor never sets foot in California, if he is performing services for a California customer, he has an economic nexus with the state and is likely doing business in California for income tax purposes.
