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Does California Tax Income Earned in Other States?

Yes, California taxes income earned from ALL state sources.

If you’re a California resident, you’re no stranger to high tax rates. In fact, you pay the highest income tax in the country!

Here’s another fact: if you earned income working in another state, you’ll still be forced to pay the same, high California tax rate, even if that other state has a lower tax rate.

According to CA.gov, California residents  are “taxed on ALL income, including income from sources outside California.”

What About Income From a Non-Income Tax State?

If you earned income in one of the seven states that doesn’t assess income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming), or one of the two states that have no tax on wages (Tennessee and New Hampshire), you’re still required to pay tax on that income to the state of California.

So, let’s say you work remotely from your home in San Diego for a company located in Texas. When filing, you’ll report this income on your California tax return. You’ll also pay a chunk of CA tax on it.

The one piece of good news is that you won’t need to file a non-resident tax return to the tax-free state. You’ll only be required to file a resident return to California. Continue reading “Does California Tax Income Earned in Other States?”

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How To File State Taxes If You Have Dual State Residency

If you live in one state and work in another, you’ll need to file two tax returns

When it comes to filing state taxes, it can get confusing, especially if you spend time in multiple states. You may be wondering if you can even be a resident of two states or if you’ll need to file taxes to more than one state.

The RapidTax team is available to help you with tax questions you may have. In fact, you’ll be able to report your income from multiple states with RapidTax!

There’s a variety of reasons why you consider yourself a resident of more than one state.

For example, you could;