You have to file a California nonresident tax return if you had income from California sources during a year you lived in another state and your total income crossed the state’s filing thresholds, or if California tax was withheld from your pay and you want it refunded. For 2025 returns filed in 2026, a single filer under 65 with no dependents must file once gross income from all sources tops $22,941 or adjusted gross income tops $18,353.1Franchise Tax Board. 2025 540NR Booklet California sets no minimum number of workdays before a filing obligation attaches, so even a short business trip that generates wages can put you on the hook.
Are You a Nonresident?
California treats you as a resident if you’re in the state for more than a temporary or transitory purpose, or if your permanent home is in California even when you’re temporarily elsewhere.2Franchise Tax Board. Residents A nonresident is anyone who doesn’t meet either test. A part-year resident is someone who moved into or out of California during the year. Both nonresidents and part-year residents file the same form.
The Franchise Tax Board doesn’t rely on any single factor. It weighs the overall strength of your California ties — where your spouse and children live, where your principal home is, which state issued your license and registered your vehicles, where you vote, bank, and hold professional licenses — against your ties to your home state.3Franchise Tax Board. 2025 Guidelines for Determining Resident Status (FTB Publication 1031) One or two California connections won’t flip you into resident status if your life is clearly centered elsewhere.
What California Can Tax You On
Nonresidents owe California tax only on California source income.4Franchise Tax Board. Part-Year Resident and Nonresident The main categories:
- Wages for work physically performed in California, including short trips for meetings, projects, or temporary assignments.
- Profits from a business, trade, or profession conducted in California.
- Rent from real property located in California.
- Gains from selling California real property.
Income from intangibles like stocks and bonds generally is not California source income for a nonresident. There’s an exception when the intangible has a business situs in California or when securities trading in the state is so regular and systematic that it amounts to doing business there.5California Legislative Information. California Revenue and Taxation Code 17952 For someone with a normal brokerage account managed from their home state, investment income won’t trigger California tax.
Remote Work and Equity Compensation
This is where nonresidents most often get tripped up. California follows a physical presence test for wages: your pay is California source income only to the extent you physically performed the work in California.4Franchise Tax Board. Part-Year Resident and Nonresident If you work remotely for a California employer but do all the work from your home state, that income is generally not taxable by California.
Deferred and equity-based compensation is the exception. Stock options, RSUs, and similar pay can be partially sourced to California if you earned them during a period when you worked in the state, even if you exercise or vest them years later from somewhere else. If you left California and later received a payout tied to work you did while living there, the FTB will likely claim a share.
2025 Filing Thresholds
The FTB applies a two-step test using your filing status, age, and dependents. You must file if your gross income from all sources crosses the first number, or if your adjusted gross income crosses the second. Key thresholds for 2025:1Franchise Tax Board. 2025 540NR Booklet
- Single or head of household, under 65, no dependents: gross income over $22,941 or AGI over $18,353.
- Single or head of household, 65 or older, no dependents: gross income over $30,591 or AGI over $26,003.
- Married filing jointly, both under 65, no dependents: gross income over $45,887 or AGI over $36,711.
- Married filing jointly, one spouse 65 or older, no dependents: gross income over $53,537 or AGI over $44,361.
Dependents raise each threshold. A single filer under 65 with one dependent doesn’t have to file until gross income tops $38,774 or AGI tops $34,186.1Franchise Tax Board. 2025 540NR Booklet These are measured against your total worldwide income, not just what came from California. Even a small amount of California source income can require a return if your overall income is high enough.
Two situations force a filing regardless of income: you owe any California tax for the year, or you want a refund of California tax that was withheld from your pay.
How Your California Tax Is Calculated
California uses a method that catches many nonresidents off guard. The state calculates a tax rate based on your total worldwide income, then applies that rate only to your California source portion.6Franchise Tax Board. FTB Pub 1100 – Taxation of Nonresidents and Individuals Who Change Residency The result: someone earning $200,000 total with $20,000 from California pays a higher rate on that $20,000 than someone earning $50,000 total with the same California slice. The formula:
California taxable income × (Tax on total taxable income ÷ Total taxable income) = Your California tax
For wages, you find the California-sourced portion with a day-count ratio: California workdays divided by total workdays, multiplied by total compensation.4Franchise Tax Board. Part-Year Resident and Nonresident If you worked 250 days and spent 25 in California, 10% of your wages are California source income. Business income across states is apportioned similarly. Deductions and credits are prorated by the ratio of California source income to total income.
Filing Form 540NR
Nonresidents and part-year residents both use Form 540NR, the California Nonresident or Part-Year Resident Income Tax Return.7Franchise Tax Board. 2025 Form 540NR You’ll also need Schedule CA (540NR), which adjusts your federal figures to California law and separates total income from the California source portion. Your California wages from Box 16 of your W-2 flow directly onto Form 540NR.
Finish your federal return first, since it feeds the California calculation. Have your W-2s, 1099s, and any partnership or S corporation K-1s ready. Forms and instructions are on the FTB site at ftb.ca.gov.
Deadlines and Penalties
Your 2025 return is due April 15, 2026.1Franchise Tax Board. 2025 540NR Booklet California grants an automatic six-month filing extension to October 15, 2026, with no form to submit.8Franchise Tax Board. Extension to File The extension covers paperwork only. Any tax you owe is still due April 15.
The late-filing penalty is 5% of unpaid tax per month, capped at 25%, with a minimum penalty of $135 or 100% of the tax due, whichever is less. The late-payment penalty adds 5% of the unpaid balance plus 0.5% per month for up to 40 months, capped at 25% combined. Interest runs on top of both.9Franchise Tax Board. FTB 1024 – Penalty Reference Chart If you can’t pay by April 15, file anyway to avoid the filing penalty, and send whatever you can toward the balance.
The FTB accepts payment through Web Pay (free bank draft), credit card (with a service fee), electronic funds withdrawal when you e-file, and check or money order with a payment voucher.10Franchise Tax Board. Payment Options Keep separate payments for separate tax years so the FTB applies them correctly.
Getting Credit at Home for California Tax
Paying California on income your home state also taxes looks like double taxation, and most states head that off with a credit for taxes paid to another state. On your resident return, you generally claim a credit equal to the California tax you paid on the same income, up to the amount of home state tax on that income.11Franchise Tax Board. Other State Tax Credit The practical effect is that you pay the higher of the two state rates rather than both stacked together. The credit goes on your resident state return, not on Form 540NR, so check your home state’s instructions and keep a copy of your completed 540NR to document what California collected.
Military Spouses: A Common Exception
If you’re the civilian spouse of an active-duty servicemember stationed in California under permanent change of station orders, your wages may be exempt from California income tax under the federal Military Spouses Residency Relief Act. You qualify if your domicile is a state other than California and you live in California with your servicemember because of military orders.12Franchise Tax Board. Military For tax year 2023 and later, you can elect to use the servicemember’s domicile, your own domicile, or the servicemember’s permanent duty station. The exemption covers wages and earned income only. California rental income or business income remains taxable.