California tax question — state request for 2017 taxes, despite no CA earnings

Home Tax Reduction California tax question — state request for 2017 taxes, despite no CA earnings

  • Avatar hammock27 
    Status: Physician
    Posts: 1
    Joined: 05/11/2019

    Hey all,

    Posting a rather specific tax question, and I’m hoping that someone has navigated this specific situation and has some advice.

    My wife is an RN, and before we were married, in 2016 she did a travel assignment in the Bay Area, which required her to get a CA nursing license, pay CA taxes for that year, which she did. We were living in CO at the time.

    2017, we lived and worked full time in CO and paid only federal and CO taxes.

    We moved to CA last year, Oct 2018.  We accordingly paid CO and CA taxes in addition to federal taxes.

    We just got this notice in the mail from the CA tax board, a request for a state tax return for her for 2017.  It seems that, because my wife held an active CA nursing license in 2017 but did not file any CA state income taxes, this has seemed to have automatically triggered this notice.  The language is “We received information from, but not limited to, the sources listed below that you held an active professional/business license, sales permit, or that employees worked for you in 2017.  This information indicates that you have a California filing requirement for 2017: BOARD OF REGISTERED NURSING”

    It has you go through a form, “Reply to FTB — Questionnaire.”

    Section F seems the most relevant here: If you were a part-year resident or nonresident of California in 2017, complete questions 1-9 below: (my additions in blue)

    1. Number of months during 2017 you were a CA resident –> 0

    2. Total amount of gross income you received from all sources –> Her 2017 gross income

    3 – 7. (Will not type out but essentially goes through several types of CA income) –> 0

    8. Total lines 2 through 7. This is your gross income –> Her 2017 gross income

    9. Is the amount you entered on line 8 more than the minimum income amounts for you filing status, age, and number of dependents listed on the chart in the enclosed notice? (-> 17,029 for single with 0 dependents; line 8 will be greater than this amount) If yes, you have a requirement to file a CA income tax return. If no, complete section G.


    From my reading of the form, it seems like we have to file a CA tax return… but this seems really stupid, and a waste of time, because I’m certain that at the end we will end up filling out a form that says we owe $0 in CA tax.

    Has anyone dealt with this situation before?

    #213896 Reply
    Avatar Peds 
    Status: Physician
    Posts: 4187
    Joined: 01/08/2016

    I have not.

    I hold an active CA license but have no income from CA.

    I do not plan to file anything.

    #213906 Reply
    Avatar DCdoc 
    Status: Physician
    Posts: 535
    Joined: 06/14/2016

    File the state form. Owe $0. Move on with life. You’ll be paying CA taxes on an ongoing basis now. Just fill out the form and be done with it.

    #213907 Reply
    Avatar G 
    Status: Physician, Small Business Owner
    Posts: 1723
    Joined: 01/08/2016

    Add this to Jim’s list of downsides of living in Cali.

    Agree with DCdoc, I would just file–unless somebody has specific experience that would indicate otherwise, filing (and owing zero) will be infinitely easier than trying to get a low/mid/high level government employee to take you off the filing list.  At least that was my experience back in the day with NY.

    I’m surprised they aren’t also charging you a penalty fee for filing late.  Or is that line 10?

    #213920 Reply
    Liked by DCdoc, Tim
    Avatar Tim 
    Status: Accountant
    Posts: 2818
    Joined: 09/18/2018

    No experience with California taxes. I guess my gut tells me “What choice do you have if your moving back there?”
    I might give that Board of Registered Nursing a call. But that’s part of California state red tape but you might get lucky and they send you some form or have this experience. Seems like you broke some type of California regulation. Path of least resistance.

    #213921 Reply
    White.Beard.Doc White.Beard.Doc 
    Status: Physician
    Posts: 875
    Joined: 02/06/2016

    I file a return in a state where I own property but owe no taxes.  My tax accountant says this is a good idea to keep the state off my back.

    In your shoes, I would simply file the CA return with a zero balance due.  This will get the state to cross you off the list of tax delinquents.

    #213935 Reply

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