How to become a California Nonresident
How to Successfully Change California Residency and Reduce Taxes
Many taxpayers consider leaving California to escape its high taxes. However, undoing California residency is never simple, and the Franchise Tax Board (FTB) carefully reviews each case under a “facts and circumstances” test. Simply changing your mailing address is not enough—you must truly relocate your life to another state.
Key Steps to Establish Nonresidency
To be recognized as a nonresident, you must demonstrate a genuine move and lifestyle change, including:
Selling your California home and purchasing a comparable residence in your new state.
Ending California employment and establishing work in your new state.
Building business and social networks outside of California.
Handling financial transactions, mail, and professional services from your new state.
Keeping thorough records, such as using certified mail and documenting out-of-state activities.
Actions That Can Hurt Your Case
FTB auditors look for ties that suggest you never really left California. Risky actions include:
Keeping your California home and allowing family members (like children) to live there.
Having children attend school in California.
Voting in California elections or maintaining a California mailing address.
Spending extended time visiting friends or family in California (every day counts as residency).
Continuing to use California doctors, dentists, or professionals requiring in-person visits.
Why the FTB Audits Residency Changes
If you file a part-year resident return and report significant income after moving, the FTB is likely to start an audit. Auditors will:
Compare the number of days you spent in California vs. your new state.
Review bank accounts, W-2s, 1099s, and state tax filings.
Check property purchases in your new state.
Even search your social media accounts (Facebook, LinkedIn, Instagram) for evidence of your location.
Final Advice for Taxpayers
For clients seeking to become nonresidents, the goal should be a clean break. Without clear and visible changes, the FTB will challenge your claim. Even if you win an audit, the legal and accounting costs can outweigh the tax savings. A well-planned, documented move is the only way to truly secure nonresident status and reduce California tax burdens.