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I go to school in North Carolina and have a job offer from a company in California, if I were to accept the offer now I'd be getting my joining bonus right away although I'd be starting work in June, 2016. My question is, if I get the bonus now will I need to pay the state tax of California or North Carolina?

edit from comments: It is actually a joining bonus, I was an intern there and they said if I accepted the offer I'd get 75% now and the rest with my first paycheck. I guess I could ask the company, was just hoping someone here could help me. –

mhoran_psprep
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Aadi Droid
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1 Answers1

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It is actually a joining bonus, I was an intern there and they said if I accepted the offer i'd get 75% now and the rest with my first paycheck. I guess I could ask the company, was just hoping someone here could help me.

The bonus is in two parts. The second part is easy. That will be taxed by whatever state taxes your normal paycheck. It is earned when you show up for work that first day.

The first part is more complex. If you agreed to that bonus, while you were still working as an intern, even if the money didn't hit your bank account until you returned back to North Carolina; then the state where you were working would be interested in taxing that money. US military reenlisting take advantage of this same tax opportunity by signing the reenlistment paper work oversees on deployment. The US government sees this as income earned overseas.

If they made the offer after you returned to North Carolina it could be argued that it was earned while you were in North Carolina. If you never worked for them, and this was part of their normal offering to new employees the argument for North Carolina to tax it is stronger.

This type of issue is moot for some state pairs because of reciprocity. They agree to tax based on where you live not where you work.

Some people want to avoid the issue because of money, others just want to avoid having to file taxes with a state for just one check.

You will have to ask them. They may want you to submit the state version of the W-4. They may not be able to offer tax advice, but they may have a default answer for new employees and a different answer for current employees. Especially if they already have a state W-4 on file for you.

The check or stub must note where any state withholding was sent.

mhoran_psprep
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