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Establishing Residency in New State for Temp Work Relocation

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ajy1995

New member
Hello, I work as a project manager in Colorado currently. My company is getting ready to send me on a 1.5 year field assignment to California for a job we’re taking on out there. I don’t have any family in Colorado, and I currently rent, I do not own a house. I will have roughly 5 months left on my lease when I go to California, so I plan to honor my lease until it is up, then not renew so I’m not paying rent in Colorado while I’m living in California. I will be getting per diem while I am in California to cover living expenses ( housing & meals ). My question is, will I become a legal resident of California even though this is a temporary move for work, albeit a lengthy one? I’m sure if I owned a place in Colorado while I was in California that I’d still be considered a Colorado resident, but since I’ll have no residence in Colorado during my time out west, will I be a California resident for tax purposes? I’ve heard that California taxes are higher, and honestly I haven’t done much research into it, but I’d obviously like to stay a Colorado resident if possible.
Also, if I posted this in the wrong forum I apologize, this is my first time using the site. Any help is appreciated!
 


adjusterjack

Senior Member
You'll be a resident. You'll have a physical address. You'll pay income taxes on money you earned in California. You'll have to register your car in California. You might have to get a California driver license. You'll have to buy auto insurance in California that complies with California insurance laws. Your employer will have to make sure his workers comp insurance complies with California law. He might even have to pay into the California unemployment compensation system.

I suggest you and your employer research this a little more carefully.

Also read your lease and see if there's a buyout clause for less than 5 months.
 

Taxing Matters

Overtaxed Member
My question is, will I become a legal resident of California even though this is a temporary move for work, albeit a lengthy one?
You'll be there for roughly 18 months with no significant ties to Colorado other than a stated intent to return to Colorado after your assignment is done. So California will consider you a resident and tax you accordingly.

But understand something important here. Even if you weren't a resident of California the state would tax you on the pay you get for the work you did while in California. Colorado would give you a credit for the tax paid to California on your Colorado return, but that just means you end up not paying Colorado tax on that California income. In other words, you'd not avoid the California tax on the salary you get while working in California by not being a resident of California. The only difference the residence will make is the taxation of your other non California income, if any. So unless you have significant income other than the salary from this job the residency wouldn't matter much.
 

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