Originally Posted by
rickair7777
Maybe they'll get to that eventually.
There was actually a recent, serious legislative proposal to continue to tax CA residents for ten years after they leave, to "discourage" and/or penalize departure.
Since I might want to leave myself eventually, I discussed this with every CPA and attorney I know who'd give me five minutes. General consensus is that it would be exceptionally unconstitutional and would be a non-starter. But they're thinking along those lines...
The bottom line with CA (and other similar deep blue states) is that you're home free as long as you're actually complying with the law. You can establish *legit* residence elsewhere, keep your house in CA and spend 5 months and 29 days in-state every year* and they can't touch you (federal rules, which they can't over-ride).
Where it becomes a problem is if you're not complying with the letter of the law, then you could be looking at prison, and they might be aggressive enough to actually make it home.
For pilots, you're going to get scrutinized if you leave but are still based there. I know people based in LAX/SFO who moved to vegas but kept their CA house and commute to work. So CA sees a house and a job in LA or SF but a claim of non-residency. So yeah, they're suspicious for sure. If you're doing that (I might someday) you REALLY need to play by the rules.
*Talk to your attorney & CPA, rules can vary slightly if two states have certain types of reciprocal agreements.
Pilots are actually a special case, but for MOST people (including spouses) if you derive significant income from working in CA they are going to tax you on it even if you are NOT a resident. And there are other problems if you marry someone who is a California resident, even if you are not:
The Community-Property Trap
Another trap for the unwary – and it’s a big one – is how California treats community property for tax purposes, mentioned above. Even if a married couple achieves separate residency status, it doesn’t mean the nonresident is free from California income taxes, despite earning all income out of state. Here’s why.
Married California couples usually file joint state returns (it’s generally required if they file joint federal returns, and most do). In that typical situation, they don’t even need to think about community income as it has no special tax consequences. But if they file separate returns, half of each spouse’s community property must be reported on each return. The reason is obvious, but not something most married California couples need to worry about except in the case of a divorce or death: under California law community income belongs to each spouse equally. Accordingly, if one spouse makes $1,000,000 and the other makes $100,000 (assuming the income is all community and not separate), each will report $550,000 on a separate return (50% of the total $1,100,000 of community income), and pay taxes accordingly.
This usually doesn’t matter much if both spouses are California residents. But what if one spouse leaves California and sets up domicile and residency in another (lower-tax) state with the specific purpose of reducing state income taxes? Will the nonresident spouse still have to file tax returns reporting his or her share of the community property? Remember, California uses domicile status to determine community property rights, and it uses residency status to determine who is taxed. The rule is, if both spouses are domiciliaries of a community property jurisdiction (either another state or another country), then California’s community property rights apply. That means half of any community income belongs to each spouse.
Yeah, the rules are many and some tricky. Get expert advice.