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Old 11-12-2016, 10:42 AM
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Join Date: Nov 2016
Location: Idaho/California
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Relocating to Idaho from California

First of all, I hope this is the correct place to post this. My wife and I currently live and own a home in California. We have purchased a second home (fixer upper) in Idaho and the long term plan is to to move and reside permanently in Idaho. We are both retired in California and draw state pensions. My question is:
If I establish permanent residency in Idaho now (residents get a large discount on their property taxes the first yar and the second year no property taxes at all are accessed) before the end of 2016, how does that affect my state tax filing in Idaho and California? I will not be working in Idaho, only drawing my California pension and working on home repairs. My wife will stay in the California home as long as her elderly parents are alive and then we will sell that home. Will my wife have to file an individual state return in the future and me filing an individal return in Idaho. Do we file joint or individual federal tax returns?
I apologize for the length of this and hope for help clearing up much confusion/concerns for me. My California vehicle will also be registered in Idaho.
Thank you for your help in this.



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Old 11-13-2016, 12:11 AM
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Join Date: Oct 2010
Posts: 4,854
My question is:
If I establish permanent residency in Idaho now (residents get a large discount on their property taxes the first yar and the second year no property taxes at all are accessed) before the end of 2016, how does that affect my state tax filing in Idaho and California?====>I assume that you mean you permanently move into ID from CA, then you need to file 2 returns for 2016; A part-year resident return is for people who moved during the tax year. If you were a resident of one state for part of the year and then a resident of another state for part of the year, then you need to file a part-year resident return in the first state and a part-year resident return in the second state you need to file CA return as a part year of CA and also need to file your ID return as a part year resident of ID;you need to report to CA only on CA source income that you earn ONLY in CA and as a part year resident of ID, you need to report your ID source income to ID.

I will not be working in Idaho, only drawing my California pension and working on home repairs.====>CA will tax on your pension(the IRS provides you with a calculation to figure out how much of your pension is tax-free and how much is taxable) aslongas you live in the state once you move into ID, then While the state of CA where you earned your pension may not tax your retirement income, you may still have to pay taxes on the income in your state of residency of ID. For example, if you earn a pension in CA, then move to ID, then, ID may require you to pay taxes on this income. Tax rules on retirement income vary significantly by state



My wife will stay in the California home as long as her elderly parents are alive and then we will sell that home. Will my wife have to file an individual state return in the future and me filing an individal return in Idaho. Do we file joint or individual federal tax returns?======> CA is a community property state. This means that all property married couples acquire while domiciled in CA is community property. Each spouse owns an equal share of all community property until you move into ID .then your spouse ?d be a full year resident of CA and non resident of ID and when you move into ID by yourself, then you ?d be still part year resident of CA and part year resident of ID, in this case,even if you live in a different state from your spouse but want to use the married filing jointly status on your taxes, rest assured your separate residences won't automatically disqualify you. you may file your CA or ID taxes as MFJ or MFS whichever is you want.if you file CA return as MFJ then you need to report your income in ID to CA and vice versa.



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