Do I Pay Income Tax in California if I Work in Nevada?

The state of California requires residents to pay personal income taxes, but Nevada does not. If you hold residency in California, you typically must pay California income taxes even if you earn your living in Nevada. California’s Franchise Tax Board administers the state's income tax program. Under certain conditions, the FTB will exempt specific individuals from state income tax requirements.

The FTB requires California residents to pay state income taxes regardless of where they earn their money. This tax requirement applies even if you live in California on a part-time basis. Nonresidents who earn a living in California, but hold residency in another state, must also file a California income tax return. These requirements apply to the majority of California residents and nonresidents, with the exception of certain low wage earners, military personnel and Native Americans.

If your California gross or adjusted gross income meets or exceeds limits established by the FTB, you must file a California tax return. California gross income includes all of your earnings, even wages earned in Nevada. California adjusted gross income is based on your federal adjusted gross income, after state adjustments allowed by the FTB. California has multiple minimum-earnings categories, based on your age, filing status and family size. For example, if you are under 65 years of age, file as a single person, have no dependents and earn less than $17,028, you are exempt from California income taxes as of the 2017 tax year.

If you hold residency in California, but serve in the military in Nevada under a Permanent Change of Station Order, you usually don’t have to pay California income taxes. This applies only to military wages you earn while serving in Nevada, however. If you earn income from other sources, the FTB may require you to pay state income taxes on those earnings. This could apply to money earned in California or in another state (e.g., wages from a part-time job in Nevada, or earnings from a business you own in California).

California also offers a tax exemption to Native Americans living in areas designated as “Indian country,” which the FTB defines as Indian reservations, dependent Indian communities and Indian allotments. To qualify for this exemption, you must hold membership with an Indian tribe recognized by the federal government; live on land designated as Indian country for your tribe; earn your income from the tribe in which you hold membership; and earn your income within your tribe's designated Indian country. For example, the Fort Mojave Indian Tribe of Arizona holds land designated as Indian country in both Nevada and California. If you live on the tribe's land in California, but work for the tribe on its land in Nevada, you may qualify for the California income tax exemption.