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My husband has been notified that he will be laid off as of December 15th. This is good, in our case, as he is eligible for Early Retirement, and there will be a substantial severance package. He will be allowed to take the package in two payments spread out over 24 months, if desired. We have long planned to move from California after retirement and build our "dream house" in Washington. We bought the land to do so more than four years ago. Washington is a no income-tax state. Is there any way for us to avoid paying California income-tax on this money?
Carol
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Carol,

Surprised no one answered this (Questions almost always get answered here.)

I'm not one of the usual answer guys, but I think I can handle this one.

Even if you are in Washington, you'll have to pay CA taxes on income (or retirement) earned in CA. I think this would be the case even if it was pension income. But I'm pretty sure the severance package is going to be subject to CA state tax.

- Tom
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Oh yeah. Trying to keep more of your money from the Tax man is NOT Greedy, just smart money management and simple human nature (unless you're a monk.)

Hope someone suggest a loophole for you, but the lack of an initial response makes me think otherwise.

Good Luck

- Tom
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Tom,
Thanks for the replies! Sorry it took me so long to get back here! We have been fixing the house for sale, and with my computer unplugged and being moved from room to room, it has made it difficult to keep up with online postings--I am also asking questions on a home improvement site. I really appreciate the collected wisdom of online communities.
We are resigned to giving CA its cut. Since we are taking the severance pay in two installments, a year apart (the $$$ represents two years' pay), I guess this means we will have to file CA Income Tax forms for 2002 and 2003. Wonderful (NOT).
Again, thanks for your posts!
Carol
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