Change of situation -- still California resident?

Hi everyone,

I think I might already know the answer to my questions, but I wanted the opinion of you guys as well.

I've been living in the UK since December 2007 (so over 3 years now) and have not set foot in California or worked there for nearly 2 years now.

Last year I earned all income in the UK, and the case is the same for this year too.

As of June, what I considered my 'permanent Californian residence' has ceased to exist. It was my mother's home and she has since retired and moved to Virginia.

I still have a California driver license because I renewed it last year in my mother's old address, and up until June I had my bank account statements sent to my mother's address in California. They are now being sent to my mother's address in Virginia.

I did a dry run of my taxes and even though I owed California nothing last year in taxes, for some reason I owe them $516 this year, having earned $3000 more this year. I've played with the numbers yesterday and even if I claim I earned the same amount as last year, I still have to pay nearly $500.

I'm assuming that I still have to file CA taxes, is this assumption correct? The CA Franchise Tax Board website isn't much help, and I plan on calling them as soon as they open today.

I know from old forum posts from 2006 and the following PDF from their website (http://www.ftb.ca.gov/apps/vita/Catalog/ISstateFedDiff.pdf) that they can tax foreign earned income -- but if that's the case, why wasn't I taxed on any of it last year?  I reported my foreign earned income correctly to them (verified by checking last year's return).

Many thanks!
lilac

Update: called the California Franchise Tax Board and they said that I don't need to file because I no longer live in California.

 

If only you have recorded your conversation with FTB representative to use it as a proof!
California is one of the most stubborn states in terms of letting the former residents go and not be considered "domiciled" in the state anymore: http://www.taxesforexpats.com/expat-tax-advice/tax-advice.html#a24

Many of our expat clients are former Californians. When we see the merit, we send a petition to FTB requesting cease of residency and listing the factors for them to consider. The guidelines for determining CA residency status are as follows:
"Any individual who is a resident of California continues to be a resident when absent from the state for a temporary or transitory purpose"
The key word is here "transitory". You are considered a resident of California indefinitely until you are able to prove that you never ever will return to the Sunny State.

Thankfully although California has a domicile test it also has a very helpful day counting test for Califormia domiciliaries who reside overseas. This safe harbor test would let most folks coming to the UK break CA residence.  Here is a well written article discussing this:

http://us.kpmg.com/microsite/tax/ies/tea/spring2010/article7.asp