ASK MICKEY, CPA I’m touring the country in my RV and working remotely. Since I am living and working in more than one state, how do I determine my state income taxes?
ANSWER In most states your residency status will determine how you are taxed. For example, if you travel in an RV to California, there are three residency statuses in that state:
· Resident – taxed on All income from all sources inside and outside California.
· Part-year resident – taxed on all income received while a resident, plus income from California sources while a nonresident.
· Nonresident – taxed on Income from California sources.
Residency Status
You are a resident of California for tax purposes if your presence in California wasn’t temporary or transitory in purpose. Generally, you’re a resident if you lived in California, even if you were temporarily out of state.
Here are some examples of situations that can make you a California resident for tax purposes, according to the state:
You spend more than nine months in California during the tax year.
Your employer assigns you to an office in California for a long or indefinite period.
You decide to check out California for a while, with no real plans to leave.
You’re in California for an indefinite period to recuperate from an illness.
Same rules apply in Arizona and Colorado
For example: A Texas CPA decides to travel in their mobile home to spend time in Arizona, California and maybe even Colorado and search for suitable permanent residences. However, they have a permanent residence (family members house) in Texas. Their bank account is in Texas, and they are employed by a Texas CPA firm.
If they spend three months out of 2023 in each state, are they required to file and pay state income tax?
The answer really comes down to their intent – whether this is a temporary arrangement, or do they intend to stay with no plans to leave.
If temporary, even though they are technical earning money in California, they do not have a residency there. If they get there and decide the like and it and plan to stay, they pretty much have established a permanent residency in that state.
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