Hi,

I started a new job in CA in 2010. I was in CA for couple of days and was paid for those days. Also, I was paid a sign-on bonus (about 15% of 2010 Federal AGI). I did sign the offer letter from my old state. My W2 shows about 9-10% of CA state tax (mostly because of the signon amount).

How would the CA state tax work in this case. Will it be something like this:

ratio = (CA state income/Total Income in 2010).

State Tax = Ratio * (State Tax on Total Income in 2010)

Is there a way I can claim that since I signed the offer letter from a state outside the CA therefore that income was not CA income ?

Thanks
Alex

" I was in CA for couple of days and was paid for those days. I did sign the offer letter from my old state. My W2 shows about 9-10% of CA state tax (mostly because of the signon amount).How would the CA state tax work in this case"---> Iguess( assume) you, as a non- resident of CA, should pay your staten tax to CA on your income that you earned in CA and can claim the tax paid to CA on your home state return for tax credit(if the tax rate of home state< the state tax rate of CA)


"Is there a way I can claim that since I signed the offer letter from a state outside the CA therefore that income was not CA income ?"--->As said above, you earned the income in CA , so you are liable for FICA Taxes and state income taxes on the income that you earned in CA. You can claim your tax credit on your home state tax retrurn.

Only difficulty is that my home state has no state tax, so unfortunately just because of few days, I would be paying too much tax in CA.

I was hoping that by claiming that signing was done outside the CA then it shouldn't be counted as CA earning. But looks like that can't be done.

Thanks
Alex

" Only difficulty is that my home state has no state tax, so unfortunately just because of few days, I would be paying too much tax in CA."---> Then you can claim the CA state taxes paid to CA on your federal return by claiming your itemized deduction on Sch A line 5( only itemize if the deductions are greater than your standard deduction for your filing status); however, you can't (don't) claim your itemized deductions , thenyou can't deduct your CA state taxes that you paid to CA on your return. I guess you may need to adjust your W4 form to adjust the numer of withholding alowances with your employer to properly determine taxes withheld from your paychecks.
Please visit the IRS website here( you can follow the instructions on W-4); http://www.irs.gov/pub/irs-pdf/fw4.pdf?portlet=3

" I was hoping that by claiming that signing was done outside the CA then it shouldn't be counted as CA earning. But looks like that can't be done."--->No i don't think so; it was CA that you earned the income, so you must report it to CA not outside CA.