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Thread: Moving and Income Taxes...

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    Firefly519's Avatar
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    Moving and Income Taxes...

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    DH and I recently PCS'ed to new state from California. I have gotten the new DL, bought a new home and changed my voters registration information in new state. My employer desired to keep me on and is allowing me to work from home in new state. As I am working in my new state, I should be paying income taxes in my new state. I have that one down.

    My employer will not change my tax withholdings to my new state, saying that I work in CA. That is fine, but my new state says I work there since it is feasibly too far to commute to my former office (>1000 miles away). So currently, I am having to pay income taxes to CA immediately out of my paycheck, and then will have to pay to new state at the end of the tax year.

    Can anyone tell me how this is possible, and what I need to do to fix this? I have worked for companies with employees in other states before and I always paid taxes to the state I lived in, not where the company was based.
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    I am pretty sure your employer has to change to your new state. But I can't swear on it. I suggest calling the IRS and asking them what have to say on the matter.
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    Quote Originally Posted by Firefly519 View Post
    DH and I recently PCS'ed to new state from California. I have gotten the new DL, bought a new home and changed my voters registration information in new state. My employer desired to keep me on and is allowing me to work from home in new state. As I am working in my new state, I should be paying income taxes in my new state. I have that one down.

    My employer will not change my tax withholdings to my new state, saying that I work in CA. That is fine, but my new state says I work there since it is feasibly too far to commute to my former office (>1000 miles away). So currently, I am having to pay income taxes to CA immediately out of my paycheck, and then will have to pay to new state at the end of the tax year.

    Can anyone tell me how this is possible, and what I need to do to fix this? I have worked for companies with employees in other states before and I always paid taxes to the state I lived in, not where the company was based.
    Does the company have a physical location in your new state? If not that may be why they are trying to still tax you at California rates.

    You are only being charged tax on FICA - Social Security and Medicare, Federal Income Tax and State Income Tax. Since you no longer live in California you should not be required to pay California state taxes, but your employer will still have to. It is your responsibility to make sure that you aren't double taxed on FICA. For example, if you switch jobs half way through the new your new job doesn't know how much you've paid into FICA so you have to calculate it at the end of a year for taxes in case you hit the threshold and would get your over payment as a refund.

    Hopefully that made sense!

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