Out of state Independent Contractor

[nguyendm]

Just got a letter saying I haven't paid my 2012 CA state tax.

So initially my Virginia employer moved me out to California to contract for a company out in LA for five months. I moved out in November 2012 and with the contract being renewed for another year, I have been living here ever since. I get paid through my VA employer, they deposit directly into my bank account even though I believe the checks are addressed to my old VA address. My employer also pays for my rent out here. Technically, they just take a cut from my paycheck though.

I paid my 2012 state taxes to VA. I have been paying estimated taxes for 2013 to VA. I assume I was correct here by being paid from a VA company but I may (probably) be wrong. I just received a letter saying I haven't filed my CA income tax return. When I filed my VA tax return for 2012, I said I lived in CA since November 2012 and thought everything was fine. I'm not sure how to reply to this letter or if I'm supposed to even file a tax return. If I am, will I be able to credit it?

I'm also worried about 2013 taxes because I have been paying the estimate tax to VA instead of CA even though I have been living here over a year now. Am I able to get the money back from VA and pay it to CA?

Any advice would be greatly appreciated. Thanks in advance.
Duy

 

[FlyingRon]

First off, independent contractors don't have employers. I have my doubts about you being properly classified.
You do also understand the amount your "employer" pays you for rent is almost certainly taxable income to you.

You are wrong. If you are living and working in California you owe tax to California (and not Virginia) even if the "employer" is elsewhere.

Yes, you will need to file tax returns to Virginia to get back the erroneously remitted tax. You'll need to file appropriate returns to California.
Depending on just how you treated things on your Federal returns, you may have to amend those.

You're probably going to need help from a tax advisor (preferably one who operates year round).

 

[Stephen1]

First off, independent contractors don't have employers. I have my doubts about you being properly classified.
You do also understand the amount your "employer" pays you for rent is almost certainly taxable income to you.

The OP could easily be an employee (I was in a similar situation the end of 2012 - beginning of 2013). Employer "A" located in VA is contracted to provide certain services to company "B" at a site in CA. Employer "A" sends their employee, OP, to CA to provide those services so Employer "A" may fulfill their contract. OP remains an employee of "A". Company "B" pays "A" (not OP) for the services.

Lucky for me when I did this that I lived in and provided services in a non-income tax state and my employer (who was in an income tax state) understood the difference and didn't do any state withholding on me.

 

[davew128]

The OP could easily be an employee (I was in a similar situation the end of 2012 - beginning of 2013). Employer "A" located in VA is contracted to provide certain services to company "B" at a site in CA. Employer "A" sends their employee, OP, to CA to provide those services so Employer "A" may fulfill their contract. OP remains an employee of "A". Company "B" pays "A" (not OP) for the services.

Lucky for me when I did this that I lived in and provided services in a non-income tax state and my employer (who was in an income tax state) understood the difference and didn't do any state withholding on me.

I would tend agree with you if not for the fact OP is paying ESTIMATED TAXES. Employees don't have to do that on there wages.