Hi, I am thinking about moving from California, possibly leaving the country. My current income in California is accrued by providing individual loans and holding property as collateral. The interest earned from these loans is reported to the IRS with a 1099-int.

My question is, does 1099-int interest earned in California get taxed by California if I no longer live in California? As this money is not W2 earned income, I was told it is considered passive income and not subject to California Taxes?

Thank you.

#1;I guess it depends; as a part year resident of CA(aslongas you leave the state during the year), then you need to paytax on all income that you earn inCA until the time when you leave the state. You may have to file if you were in the State of California for part of the year. You must file a return if you: owe $1 or more of tax, or either your gross income or agi was more than the amount shown in the Nonresident/part year resdient California Tax Booklet for your filing status, age and number of dependents.Even if you do not have to file a return, you should file one in order to get a refund if CA state income tax was withheld from your pay or if you made CA estimated tax payments.


#2;it depends; You may have to file if you were in the State of CAfor all or part of the year. interest is taxable income. However, if the interest is your only income, and its less than CA exempt income level, then you are not required to file a tax return.I guess you cna contact CA FTB for more info in detail on the issue.

Thanks! Not what I was hoping for. It may be worth considering moving all investments out of the country and renouncing citizenship. Eliminating both fed and state tax burdens.

Thanks! Not what I was hoping for. It may be worth considering moving all investments out of the country and renouncing citizenship. Eliminating both fed and state tax burdens.