Califirnia Tax
Moderator: Mark T Serbinski CA CPA
-
- Posts: 17
- Joined: Tue Apr 12, 2011 3:23 pm
Califirnia Tax
I am a foreign government employee working for the Consulate General of Canada. I am not a U.S. citizen, however I am a Lawful Permanent Resident of the US. My employment income is subject to taxes in Canada. I am exempt from tax in the US by virtue of Article XIX of the Canada-US treaty. Is my employment income subject to California tax?
-
- Posts: 17
- Joined: Tue Apr 12, 2011 3:23 pm
Be careful, Canada is generally reluctant to grant foreign tax credit on income that they consider Cdn-sourced.
However, a little research reveals that Cali DOES grant tax immunity for consular workers BY TREATY, so this would probably cover you.
https://www.ftb.ca.gov/law/infoletter/20060323.pdf
The best source to ask uis your co-workers.
However, a little research reveals that Cali DOES grant tax immunity for consular workers BY TREATY, so this would probably cover you.
https://www.ftb.ca.gov/law/infoletter/20060323.pdf
The best source to ask uis your co-workers.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing ![Very Happy :D](./images/smilies/icon_biggrin.gif)
![Very Happy :D](./images/smilies/icon_biggrin.gif)
-
- Posts: 17
- Joined: Tue Apr 12, 2011 3:23 pm
As Nelsona investigated it seems you may be able to exempt by treaty the Cali wages, so I would try that for sure.
You are a resident of Canada ( factual resident) since your employment with the Federal govt deems this to be so and therefore you need to file T1based on your province of residence. You can not claim mort interest or taxes on a T1 we do not itemize in Canada.
You are a resident of Canada ( factual resident) since your employment with the Federal govt deems this to be so and therefore you need to file T1based on your province of residence. You can not claim mort interest or taxes on a T1 we do not itemize in Canada.
JG
-
- Posts: 17
- Joined: Tue Apr 12, 2011 3:23 pm
The California FTB letter referenced by nelsona does not specify which country the consular officer the ruling is for. FTB Pub 1031 says in section I, "residents of California are taxed on all income". It also says in section K, "a tax treaty between the U.S. Government and a foreign country may exempt some types of income from federal taxation. . Generally, unless the treaty specifically excludes the income from taxation by California, the income is taxable". The Canada-US treaty does not specifically exclude income from taxation by California. Article II of the treaty says, "Taxes imposed by the states of the United States, and by the provinces of Canada, are not generally covered by the Convention. However, if such taxes are imposed in accordance with the provisions of the Convention, a foreign tax credit is ensured by paragraph 7 of Article XXIV (Elimination of Double Taxation)."
Its up to you. You do not know which country was specified, and could very well have been canada.
The treaty language for governemnt services is boilerplate for most traties, so I do not believe that canada's would be different than the unnamed country. Add this to the genral non-treaty provisions accorded all diplomats, regardless of treaty status, and I'm 90% confident that you are not taxable in US on your Cdn govt income. I pulled that out with 15 seconds of research.
As I said, your colleagues would be in best position to know if they have had to pay Cali tax or not. ask around at the LA consulate. You obviously are not in a vacuum.
The treaty language for governemnt services is boilerplate for most traties, so I do not believe that canada's would be different than the unnamed country. Add this to the genral non-treaty provisions accorded all diplomats, regardless of treaty status, and I'm 90% confident that you are not taxable in US on your Cdn govt income. I pulled that out with 15 seconds of research.
As I said, your colleagues would be in best position to know if they have had to pay Cali tax or not. ask around at the LA consulate. You obviously are not in a vacuum.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing ![Very Happy :D](./images/smilies/icon_biggrin.gif)
![Very Happy :D](./images/smilies/icon_biggrin.gif)
-
- Posts: 17
- Joined: Tue Apr 12, 2011 3:23 pm
Actually my colleagues don't know. How can I find out for sure? I emailed the FTB and got the response below.
Thank you for visiting the FTB website.
California taxes all income you received while you were a resident of California and/or the income you received from California sources while a nonresident.
A resident is any individual who is:
In California for other than temporary or transitory purposes,or Domiciled in California but who is outside California for temporary or transitory purposes.
We have provided a link below to FTB Publication 1031,Guidelines for Determining Resident Status for additional information.
http://www.ftb.ca.gov/forms/2010/10_1031.pdf
Nonresidents are taxable only on income from California sources. A nonresident or part-year resident will file FTB Form 540NR.
Thank you for visiting the FTB website.
California taxes all income you received while you were a resident of California and/or the income you received from California sources while a nonresident.
A resident is any individual who is:
In California for other than temporary or transitory purposes,or Domiciled in California but who is outside California for temporary or transitory purposes.
We have provided a link below to FTB Publication 1031,Guidelines for Determining Resident Status for additional information.
http://www.ftb.ca.gov/forms/2010/10_1031.pdf
Nonresidents are taxable only on income from California sources. A nonresident or part-year resident will file FTB Form 540NR.
-
- Posts: 17
- Joined: Tue Apr 12, 2011 3:23 pm
As long as CRA hasn'rt denied you the the Cali tax on your Cdn return as a credit, I would just keep on doing what you are doing.
You and the others that are paying could ask FTB. Then you would know going forward.
You and the others that are paying could ask FTB. Then you would know going forward.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing ![Very Happy :D](./images/smilies/icon_biggrin.gif)
![Very Happy :D](./images/smilies/icon_biggrin.gif)