"ntt4don[at]nttworldwide.com" <ntt4don[at]nttworldwide.com> wrote:

- quote -

If an employee never sets foot in CA, how can CA tax their
wages?? The income is source where it is earned: Nevada

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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ntt4don[at]nttworldwide.com wrote:

- quote -

The source of income from personal services is the place
where the services are performed.

Your employee has no California source income unless he
performs services in California. If he does spend some time
on the employer's business in California, the employer
should withhold CA tax to that extent, and the employee
should file a nonresident California income tax return to
report the income and show the withholding as a credit. As
long as no services are performed in CA, no CA tax and no
withholding.

You might get a different answer in some states. In NY, for
example, if the employee spent ANY time in NY, ALL of his
compensation would be considered NY source income. Not so
in CA.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"ntt4don[at]nttworldwide.com" <ntt4don[at]nttworldwide.com> wrote:

- quote -

This might be one of those rare situations where a CA
company could benefit from a NV registration. But in
general, where the check comes from is not binding on where
the income is earned. Katie might have a different take vis
a vis CA Franchise Tax Board.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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ntt4don[at]nttworldwide.com wrote:

- quote -

There is nothing unique about this situation.

- quote -

Not if the work is performed in Nevada.

- quote -

True.

- quote -

The income is sourced where you perform the work. Work in Nevada,
it is Nevada income.

- quote -

--
Alan
http://taxtopics.net

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My question has to do with a California Corporation paying
wages to a Nevada resident who works out of their Nevada
home. I can't find a post which deals with this unique
problem.

The question is whether or not California state taxes should
be withheld from a Nevada employee's wages.

Nevada residents will argue they do not have state taxes in
Nevada and they are working in Nevada (albeit for a
California company), they therefore should not be California
wage taxed because they do not reside in California.

Is the income "Sourced in California?" This seems to be the
influencing factor in determining the answer to this
question.

Someone please shed some light on this annoying question.
thx

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