Discussion:California safe-harbor classification as non-resident
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Discussion Forum Index --> Advanced Tax Questions --> California safe-harbor classification as non-resident
Discussion Forum Index --> Tax Questions --> California safe-harbor classification as non-resident
| 4 June 2009 | |
| I want to ask those brilliant minds out there (you know who you are) about the California safe harbor to file as non-resident (TC Sec 17014).
My client has been absent from CA (living in the UK) for several years, since 2006. His domestic partner had a contract to work there, so he moved with his partner. In mid-2008 he started a job with a British company and he will be working there at least until the end of 2009, if not more. My question is, can he file as a CA non-resident claiming the safe harbor? He has been working in the UK all this time, but as self-employed. Does this also count toward the 546 days? …and he has CA ties, since he has a rental property, and is planning on returning at some point next year. Thank you! | |
| 4 June 2009 | |
| Also, does the TP qualify for the safe harbor since he got married in CA in 2008 before the passing of Proposition 8, and the marriage is still valid?
Thanks | |
Wonder Woman USA (talk|edits) said: | 4 June 2009 |
| If he's planning to return, CA will consider him a California resident. | |
| 4 June 2009 | |
| Yes, but I wonder if he can take the safe harbor(TC Sec 17014)and be considered a nonresident for CA income tax purposes since his spouse left the US with a employment-related contract and they both have been living in the UK for more than the 546 required days. Also, Does it make a difference if he files a CA return as MFS? Or he has to file MFJ to be able to claim the safe harbor rule?
Thank you! | |
| 4 June 2009 | |
| No, they didn't register as domestic partners, but they got married in CA in 2008 before proposition 8 passed, so they are legally married in CA. And my client is planning on filing "married filing separate". Hopefully he can take the safe harbor and file as CA non resident.
Thank you. | |
| 4 June 2009 | |
| Lalva, first, I don't think the partner's time working as an independent contractor counts, as odd as that may sound. The statute says "employment-related contract," and so far there hasn't been any interpretation of what exactly that means. My guess is that ICs don't count. Might be interesting to raise the question with someone at FTB Legal, maybe Terry Collins if he is still around. Also, even if the IC partner is covered by the safe harbor, prior to the marriage the other partner almost certainly is not.
From the date of the marriage forward, however, the spouse who is an employee counts for himself and also for the other spouse. So if they will be gone for at least 546 days from the later of the date of the marriage or the date the employed spouse started the employment, I believe they will both qualify for that period. | |
| 4 June 2009 | |
| Thank you so much for your help.
Katie, Do you think that he can claim the safe harbor rule now, in his California 2008 return, even if he is only 330 days from the marriage/contract? He will be abroad for another 216 days at least. Or he has to wait until he files his 2009 return to claim it? | |
| 4 June 2009 | |
| You can go ahead and claim it if it is expected that they will qualify. Of course if they come back before the 546 days have run, the general rules (absence for a purpose that was not temporary or transitory) would apply to 2008.
And they may qualify as nonresidents under the general rules anyway, depending on all of the facts and circumstances. | |
