california part-yr resident or nr

[tracyhoney]

Hi,

I moved to CA and started working in California with OPT in July and changed to h1b in Oct. I am a non-resident according to SPT of IRS. However, for California state taxes, am i a non-resident or a resident? If I am a resident of California, did it start in July or Oct?

Thanks

[Visa Taxes Expert]

Hello

Like you mentioned, you are a Non Resident Alien for Federal Taxes, since you started H1B in October. So please file Form 1040NR.

Also File 8843, to tell IRS, that you were in Tax Exempt Status in the early part of 2008.

In H1B from October, you need to pay FICA Taxes (Social Security and Medicare Taxes).

In OPT if they had withheld FICA, you can claim them back by filing Form 843.

So in short Federal file Form 1040NR and Form 8843.

Now, State since you have been working since July, you can file a Resident California State Tax Return.

Hope it helps!

[Atlanta Tax Guru]

Actually, he would file as a PART-YEAR resident of California, filing Form 540NR.

[elem_tax]

I have been working from Jan on OPT and move to H1B in october. As I do not meet the substantial presence test I am filing 1040NR.

For CA, do I file 540NR or 540 (as a resident?). I read somewhere that if you file 1040NR you have to file 540NR?

[Atlanta Tax Guru]

If you lived and worked in California for the entire year, then file Form 540.

The state determines residency differently than the IRS.

[juan_argentina]

I read a PowerPoint of a talk given by people from FTB that says that if you file 1040NR you have to file 540NR. Moreover, the instrucctions for the form 540NR mention, many times, the 10400NR, while the instrucctions of the form 540 do not mention the 1040NR (it always refer to 540).

Nevertheless, yesterday I called to FTB twice and they gave me two opposite answers: one person said 'fill 540' and the other 'fill 540NR'... SO????

Which one should I complete??? I stayed in California from Sept 2007 to March 14.....

[juan_argentina]

I forgot to tell you that I had a J1 visa

Thanks

[Visa Taxes Expert]

If you stay the entire year in the state in J1, file the resident Form 540.

Definition of residency:

Becoming a non-resident for California tax purposes is easier said than done. California defines a resident as anyone: (1) in the state for other than a transitory or temporary purpose; or (2) whose "domicile" (the permanent home to which a taxpayer intends to return) is in California but who is outside the state for a transitory or temporary purpose. California presumes a resident spends more than 9 months a year in the state; however, spending less time does not create a presumption of non-residency. Also, one may be a resident of California even though his domicile is elsewhere.

California takes an extremely aggressive approach in classifying taxpayers as residents. For instance, a taxpayer who worked for 4 years outside of California was still considered a resident, because his wife and children remained in the state during that time. The law has since been modified to permit a resident working outside the state for at least 18 consecutive months to be generally considered a non-resident. Annual visits to California for not more than 45 days are permitted under this exception.

Hope it helps!