Contact UsWhen/how to shift residency from AZ to CA when starting a new job remotely before moving
I just started a new job in California, and am going to move from Arizona to California next month. I started work two days ago, and am temporarily living with my in-laws in California for about 2 weeks, while physically working in California. After that, I'm going to go back to my home in Arizona, and telecommute for the same company for 3-4 weeks until I relocate. Meanwhile, my wife is still living and working in Arizona, and will end her job before we move.
My employer of record is a HR firm that serves as employer of record for all of their clients.
What I'm wondering is what permanent address I should use, and what the state tax consequences will be: my home address in Arizona, or my in-laws in California, where I'm temporarily staying. Obviously, once I move to California permanently, I'll use my new CA permanent address. Until then, am I an AZ resident, CA resident, or do I have the option of picking? And what will the tax consequences be? Will I have to pay CA tax on the work I do for the CA company from my home in AZ, and/or the work I do while temporarily staying in CA? If so, will I also have to pay AZ tax on that same income?
My employer of record is a HR firm that serves as employer of record for all of their clients.
What I'm wondering is what permanent address I should use, and what the state tax consequences will be: my home address in Arizona, or my in-laws in California, where I'm temporarily staying. Obviously, once I move to California permanently, I'll use my new CA permanent address. Until then, am I an AZ resident, CA resident, or do I have the option of picking? And what will the tax consequences be? Will I have to pay CA tax on the work I do for the CA company from my home in AZ, and/or the work I do while temporarily staying in CA? If so, will I also have to pay AZ tax on that same income?
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Tax Professional Answers
John Stancil
You are not a resident of California until you have established residency there. This occurs when you have the trappings of residency, such as a driver's license, a home that you own or rent, voter registration, etc. Until that time, you are still a resident of Arizona and owe state taxes in AZ for any income that you earn, regardless of where that income is earned. You will also owe taxes to CA as a non-resident until such time as you have established residency there. AZ will give you a credit for taxes paid to CA that were paid while still an AZ resident.
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