Tax Tips for U.S. Americans Abroad

Do U.S. Expats Need to File California State Taxes?

Do U.S. expats need to file California state taxes? Possibly. One thing for sure though, is that all U.S. Citizens and Greencard Holders are required to report their worldwide income to the IRS regardless of where they live and work (just see this post to learn more about that).

If you are no longer domiciled (meaning, you don’t consider yourself to have a permanent home in the states that you will return to if your job contract expires) read on. If you still are domiciled in California, you will most likely need to file a state return every year!

filing state taxes as a us expat

Here’s a simple guide to help you determine whether you need to file your state taxes as a U.S. Expat:

Did you live in California for any part of the year?

  • Yes: You will need to file as Part-Year Resident, skip down below
  • No: Continue on

Did you earn any California sourced income during the year?

  • Yes: You will need to file as Non-Resident, skip down below
  • No: You don’t need to file
  • I don’t know: See below – What is California Sourced Income?

What is California Sourced Income?

  • Money/income earned from a physical property located in California (i.e. rental income from your old Californian home).
  • Money/income earned while you worked physically in California State (i.e. any income including normal salary from your non-US employer) while on a business trip from a company located in California.

Other Californian Income Sources are listed here.

California Specific Filing Details

As a Part-Year Resident: You are taxed on all income received while being a resident of California.

As a Non-Resident: You are taxed only on income from California sources.

If you have California sourced income: You will need to file a California State Tax Return, and your total gross worldwide income is more than the relevant threshold.

Expat Tax Benefits For U.S. Californians abroad:

Which expat tax benefits does California State allow?

  • Moving Expenses: Yes ✓
  • Foreign Earned Income Exclusion: No X
  • Foreign Tax Credit: No. X

How do you avoid paying State Taxes in the future? Check out our article here.

Is this a lot to process?

The information we shared on whether U.S. expats need to file California state taxes is a lot. So don’t panic if you can’t understand it all! We at MyExpatTaxes can help you out with your state tax filings in an affordable way. Click here to sign up for our app, and get ready for a fun ride!

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