I have a client who is planning to move to CA in 2016. I'm trying to estimate his tax liability in CA. He receives a GM pension. It looks like CA taxes pensions. Correct?
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About the only thing CA doesn't tax is social security & CA muni bonds.. -
You missed a biggie, CA does not tax unemployment compensation. Also if move is job related, you'll get moving expense deduction in CA. And CA does not conform to some of the 1040 page 1 income adjustments.Originally posted by Y2KEA View Post"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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That is correct. The basic rule in California (and probably most if not all other states that have a personal income tax) is that California taxes all of a person's income while a resident and all of his income from California sources while a nonresident. For the year someone moves into or out of California, he must file the return form for a nonresident or part-year resident. That is Form 540NR.Originally posted by Jan SRoland Slugg
"I do what I can."Comment
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Thanks. I did a "dummy" part year resident MI/CA return. It shows that he will owe CA tax due to the pension. I advised him to have CA tax withheld once he moves. He does not pay MI tax on his pension because he is 85.Comment
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If the pension is from a state source in MI, good luck on them withholding state tax for another state. He may have to pay estimates to CA.Comment
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