[prakashraju]

I was part time resident in CA (Jan month in 2009) and moved to WA state in Jan, 2009, but my payroll was deducting CA state taxes, how can I get tax refund from CA state? And How should I report my income earned in CA tax form?

[MukatA]

You will file returns for both CA and WA. On WA return show income while in WA. On CA return show income while in CA. You will have a refund.

With CA return attach WA tax return also. Also attach a letter from employer that you lived and worked in WA from... to...

[ebaines]

If you haven't already done so, have your employer stop withholding CA tax and start withholding WA tax. As it is, you will have to write a big check to WA for the taxes you owe for 2009. For 2010 if your employer can't (or won't) withhold WA taxes, you should file estimated taxes quarterly to avoid getting hit with a penalty for underpayment.

[prakashraju]

Thanks for the quick response! There is no WA state tax on the income. Also, I don't know If I would be able to get a letter from my ex-employer about my residency in WA state (the CA tax withheld was from my previous job).

My worry is, will I be targeted for Auditing?

[ebaines]

Thanks for the quick response! There is no WA state tax on the income.

Doh! I should have known that... That certainly makes things easier (and less expensive).

Also, I don't know If I would be able to get a letter from my ex-employer about my residency in WA state (the CA tax withheld was from my previous job).

My worry is, will I be targeted for Auditing?

Oh - so you changed jobs - that wasn't apparent from your oriignal post. It sounded as if your current emploer was withholding CA taxes even though you live in WA, but I assume now that he is not, correct? Your old employer will send out a W2 showing one month of CA earnings, and your new employer will send you a W2 showing 11 months of WA earnings. The point Mukata was making was if your current employer was reporting your current address as CA, you could have an issue. Since that's not the case, there's no need to worry about a letter.

You will have to complete a part-year resident tax return for CA. Just to clarify something Mukata said - on that tax return you actually report all your income for the year, and the initial tax rate is determined as if you made that much while living in CA, but then you multiply by the percentage of your income from CA sources. Result is you pay CA tax only on CA income, but the CA tax bracket is determined by your total income. You may or may not get a refund from CA.