Income tax question - Anyone working remotely in TX for CA / Silicon valley company ? (employees, consulting)

[dipkat]

I currently live in NJ and have Austin relocation plans as soon as I have a job there. I am in the final rounds of interviewing with a silicon valley tech startup who will let me work remotely from Austin (that was a pre-condition). If I do land the job, I was wondering the following -

1. Living in TX a no tax state, am I still liable for state taxes in CA since I work for a CA based company?
2. Will the new company withhold CA taxes from my salary (W2)?

I have heard lot's of chatter about the CA taxation department's aggressive stance in claiming taxes from out of state telecommuters and remote workers working for a CA based company. The popular argument seems to be that remote workers are liable, since they receive funds from an income source based in CA.

This is very important for me to know, prior to any negotiations on compensation with the hiring company in CA.

Anybody here working remotely for a CA based company, I would like to know what's your tax situation.
No state tax in TX is a big incentive for me to relocate to Austin, however if I am going to be extorted to pay CA state tax, it's a big dampener.

[Austin97]

we have people that do work in california. California may still come after you which is a hassle, but when our employees work from texas it falls under texas tax law. When they work in california, then it falls under california tax law.

[petro]

I work for a Silicon Valley tech company, but we have an office here, so I'm not working "remote." That said, I still think you are responsible for following the income tax code for the state you are living/working in, not where your company is headquartered, but correct me if I'm wrong.

[centralaustinite]

Yes, you only owe income tax in the state in which you reside. If you end up spending 90 working days in CA, then technically you owe CA income tax on that portion of your income. We have had to do that.

[scm53]

Originally Posted by centralaustinite

Yes, you only owe income tax in the state in which you reside. If you end up spending 90 working days in CA, then technically you owe CA income tax on that portion of your income. We have had to do that.

You owe income tax based on the state where you EARN it - from dollar one. My wife is a consultant, typically with twelve week engagements. We had to five four state income tax returns last year.

[dipkat]

@centralaustinite ... so your CA employer does not withhold any CA taxes on your paycheck and you never got a letter from CA taxation authorities that you owe back taxes ? That's good news. I want to make sure this is not a case where you are getting paid through a proxy entity in Texas, but being directly paid from CA itself. Can you conform? Thanks.

[petro]

I think this thread needs to be moved to the Work and Employment forum.

[dipkat]

@scm53 .., in your case your wife is telecommuting to different states for the consulting gig. So it makes sense that you file taxes in those states on the earnings received while working in that state. Now, I will be earning my wages in TX where there is no state tax on personal income. However as mentioned earlier CA *seems* to make no exception for out of state employees of a CA based company. So even though I earned my wages living in TX, would be asked to pay CA state tax. :-(

[scm53]

Originally Posted by dipkat

@scm53 .., in your case your wife is telecommuting to different states for the consulting gig.

No. She was physically there - not telecommuting. Your issue is going to be where your employer shows you WORK. My employer has Texas offices, so even though I am probably in Virginia on work fifty or more days a year, I don't owe Virginia taxes because they show my workplace as Texas.

Pretty simple - what does your employment record say? Texas or California?

[sware2cod]

I work 100% remotely for a CA based company. My home state also doesn't have state income tax. I don't pay any state income tax. Only pay Fed/FICA/Medicare tax. Been doing this for a few years now - never got any notices from CA.