Thursday, October 30, 2014

Determining CA Residency

Q.  My wife and I are visiting California and a few more states.  We were going to stay in California for six months then move on.  One of the full time RV's in the resort that we are staying at in California told us that if we stayed one day over six months that we would have to pay California state income tax.  We are retired and still own a residence in Washington state where we do not have an income tax.
We were also told that the six months is based on a rolling year not a calendar year
We were in California for about six weeks earlier this year so it looks like if this information is correct we will have to leave California sooner! Can you please tell us if this is correct information?

A.  No doubt there is a lot of mis-information making the circuit of RV parks.  According to the Franchise Tax Board (FTB) your intent constitutes a large part of whether or not you will need to file a state tax return. Here is a link on how to determine residency.

I have never heard of a 6 month rule or a rolling 6 month rule. You may have made yourself a part-year resident, and Pub. 1031 explains the circumstances where that can happen as well as residency rules with several examples. 

CA taxes residents & part time residents on their world wide income, and during the period of time you are not a resident, only on CA sourced income. Being taxed on CA source income is a reality (if you meet the filing requirements) regardless of where your actual domicile is. And in these economic times, almost all states are following this practice.

On the left side of this blog, you will find links to all 50 states. It would be prudent to pay attention to any state you plan to visit for an extended time period to ascertain what, if any, income tax or property tax liability you may incur. Thanks for writing!

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