It is a common in my practice to have one spouse become vulnerable to being treated as a California income tax resident, while the other does not.  Most often this happens because one spouse remains in California when the other returns home to run a business or work.  It can also happen when one spouse stays longer in California to supervise children in school, to undergo medical treatment or to complete a work assignment in California.  In still others, the situation arises because one spouse simply doesn’t want to return to a cold, snowy or rainy environment just because their “six months” is up.

Whatever the reason, California’s residence rules are applied to each spouse separately.  Thus, each spouse’s residence-related factors, benefits and protections derived from California’s laws and government, time spent in California each year and possible qualification for the presumption of nonresidence, must be analyzed separately.

However, the fact that the tests are applied to each spouse separately does not mean that the “nonresident” spouse will not be impacted by a determination that his or her spouse has become a California tax resident.  To the contrary, having a California resident spouse becomes a potentially very important connection to California for the “nonresident” spouse, which weighs heavily in the analysis of the state (or province) with which the “nonresident” spouse has the closest connections in determining his or her residency (to learn more about California Nonresident Tax Planning, click here).

The post Vulnerable to Becoming a California Tax Resident? What Should You Do to Protect Yourself and Your Nonresident Spouse? appeared first on California Residency Tax Law Blog.