CA people question

[JG EA]

I have a client that moved to CA in 06 and wants me to prepare her Stimulus Payment return. She is under the Fed filing requirement and under the $18,838 for CA filing requirement (not counting SS). I am assuming there is no benefit to filing CA?

By the way I did encourage her to look for free preparation in her area.

[S T]

Calif

This is something I have thought of, filing for Federal only and not Calif.

However, knowing California, they pull the Federal information and there is a Federal return with a California address, they will send a letter to that t/p.

It happened to my mother-in-law about 5 years ago when we moved her to California and her bank accounts as well such as US Treasury Bills.

California came knocking on the door and demanded a return, even though it was -0- tax liability.

So I would say, it takes you 2 minutes and a few pieces of paper, file a California return as well.

Sandy

[JG EA]

Thanks Sandy. It seems silly if no benefit but I'll include it, but I know how picky CA is. I've had many clients who have moved here get letters from CA for this and that when it doesn't apply. And they withhold on everything sold it seems and on trusts and so on.

[joanmcq]

dont file

CA has said, please do not file 'stimulus returns' with them.

http://www.ftb.ca.gov/aboutFTB/newsroom/Federal_Rebates.shtml

[JG EA]

Good catch.

[S T]

That is what Calif says now

Good catch for sure by Joan,

However, California will have to change their aggressive approach, their system information that they gather data on is less than perfect.

As mentionned in the prior post, Mother - In - Law was well below threshold for filing, so no California return was filed, but a letter and demand certainly arrived 12-18 months later. So a return was prepared and filed and the notice put to rest.

Another t/p that had moved out of Calif and retired to another State received the letters for filing for 3 years after the move, all because of some fluke in Calif system showing that they were still a resident and receiving income from Calif.

Catch 22- Do you or don't you. I say file, let Calif have the paperwork and hopefully no notices later. However, 2007 filings could be different with the Stimulus Package.

Sandy

[joanmcq]

CA is very aggressive with people that move, as well as requireing filing if they think you have income from some source, such as a T-bill sale. Taxable income may be zero if there was a security sale, but gross income isn't. I had a new client come in because he had received a notice because he had a mortgage in his name, and the FTB will calculate that if you paid a mortgage, you must have about 4X the interest in income. his only income was disability for the year. His partner, who was second on the mortgage paid it. In all of these cases the FTB had reason to think there was income there, because they get the 1099s & 1098s & W-2s. For the stimulus, they know there is no filing requirement.