Do You Still Have to Pay California State Taxes If You Move Out of State? It Depends.
When you move to another state, will you still have California state taxes to pay? The answer depends on several factors. If you want to avoid having to get your income dipped into by your new state and California, find out how you can still be taxed and how to prevent it.
California State Taxes on Real Estate Earnings
When some people move out of California, they may retain their properties as rentals. If you earn income in any way in California after moving, you will likely still pay taxes on it to California. The state only taxes income earned in California. However, this includes rental income and even work income from California businesses. For instance, if you move out of state but work remotely for a California business, you may need to pay taxes on those earnings.
California May Still Consider You a Resident for State Income Taxes
One mistake that many people make when leaving California is not making their new state their permanent residence. In fact, the California Franchise Tax Board, which determines taxes for California residents and non-residents, indicates that anyone with strong connections to California or people in the state is a resident. For example, if you move out of state but your family stays in California, you are still considered a resident of the state.
Breaking Away from California State Taxes
There are several criteria that California looks at when determining if you have connections to the state for tax purposes. Therefore, you want to break away from California during your move, you need to make sure that you do the following to establish your residency in another state:
Change your address with the state of California
Get a new driver’s license and vehicle registration in your new state
Register to vote in your new state
Change your address with financial institutions
Let groups such as clubs or worship organizations in California know that you have moved and are no longer a member
Find local medical providers in your new state and establish yourself as a patient at them
Sell any California property you may have
The above criteria are some of the things California looks at when deciding if you are a resident. Therefore, simply declaring yourself a resident of another state is not enough. You must support the move with evidence of establishing connections to your new home state.
Get Help Unloading Property in California with Our Help at IWanttoMoveOutofState.com
As with all tax issues, talk to an accountant or tax lawyer to get advice for your particular situation. However, you can get help selling your California real estate before you move. Don’t let your California property become a burden when you relocate to another state. Get the help that you need to handle your real estate and avoid paying California state taxes after you leave. Check out IWanttoMoveOutofState.com to find out how we can remove obstacles for handling your property.