What California Form 540NR (2015) Is For
California Form 540NR Short Form is the simplified income tax return for people who were nonresidents or part-year residents during 2015. Nonresidents file it to report only income sourced to California, while part-year residents use it to report all income earned during the months they lived in California, along with any California-source income from the rest of the year.
Unlike residents, who report worldwide income, nonresidents and part-year residents use a proportional tax method. You first calculate tax as if you were a full-year resident, then apply an allocation ratio based on your California-source income. This approach preserves California’s progressive income tax structure while ensuring the tax applies only to income connected with the state.
When You’d Use California Form 540NR (2015)
Form 540NR Short Form was due April 18, 2016. California granted an automatic filing extension to October 17, 2016, but any tax owed still had to be paid by April 18 to avoid penalties and interest.
You must file if you were a nonresident with California-source income exceeding the filing threshold (generally $16,256 for single filers in 2015), or if you were a part-year resident who met the income requirements listed in the filing charts for the year. Eligibility varies by filing status, age, and dependents.
To amend a 2015 return, you file Form 540X and attach a corrected Short Form 540NR marked “AMENDED, DO NOT PROCESS – ATTACHMENT TO FORM 540X.” Refund claims generally must be filed within four years of the April 18, 2016 due date or one year from payment, whichever is later.
Key Rules or Details for 2015
Who Can Use the Short Form
All of the following must be true:
- Filing status is single, married/RDP filing jointly, head of household, or qualifying widow(er)
- Five or fewer dependents
- Total income of $100,000 or less
- Income only from wages, taxable interest, unemployment, Paid Family Leave Insurance
- Only limited California adjustments (unemployment, military pay, Paid Family Leave)
- Standard deduction only—no itemized deductions
- California withholding only from W-2 or 1099
- Only personal, senior, dependent, renter’s credit, and California EITC allowed
If you do not meet every requirement, you must file the Long Form 540NR.
What Counts as California-Source Income
California taxes nonresidents only on income directly tied to the state. This includes:
- Wages for work performed in California
- Income from California real property
- Income from California business activities
- Capital gains from sales of California real estate
California does not tax unemployment benefits and generally does not tax wages earned outside California, even if paid by a California employer.
Residency Dates
Part-year residents must enter exact residency dates. Income earned while a resident is taxable from all sources. Income earned while a nonresident is taxable only if sourced to California.
How the Tax Is Calculated
The Short Form calculates tax using an “effective tax rate” method:
- Compute tax on total income as if you were a full-year resident.
- Divide California-source income by total income.
- Multiply your full-year tax by this ratio.
This ensures only California-connected income is taxed.
Military Servicemembers
Nonresident military pay is excluded from California tax if the servicemember is domiciled elsewhere. Military spouses may also qualify for protection under the Military Spouses Residency Relief Act.
Head of Household Requirement
Head of household filers must attach Form FTB 3532. If missing, the Franchise Tax Board (FTB) automatically denies this filing status.
Step-by-Step (High Level)
Step 1: Confirm Eligibility
Review the Short Form qualifications. If your income or filing situation exceeds the limits, use the Long Form 540NR.
Step 2: Gather Records
Collect W-2s, 1099s showing California withholding, residency-date information, federal return details, and records of any estimated payments.
Step 3: Enter Personal and Residency Information
Provide your name, SSN, address, and precise dates of California residency. These dates determine which portions of your income are taxable.
Step 4: Select Filing Status
Choose your filing status and attach Form FTB 3532 if filing as head of household.
Step 5: Report Income
Use the Total Income column to enter income from all sources for the year.
Use the California Income column to enter only:
- California-source income if you were a nonresident
- All income earned while a resident, plus California-source income for the remainder of the year if part-year
Step 6: Apply Adjustments and Standard Deduction
Enter allowable California adjustments and subtract the standard deduction to compute taxable amounts.
Step 7: Compute California Tax
Find tax on total taxable income using the tax table. Use lines 33–38 to calculate the effective tax rate and multiply by your California-source ratio.
Step 8: Claim Credits
Enter exemption credits and any additional credits allowed on the Short Form, such as the renter’s credit or California EITC.
Step 9: Apply Payments and Withholding
Enter California withholding, estimated payments, and payments with extension (Form FTB 3519).
Step 10: Determine Refund or Amount Owed
Use lines 39–51 to calculate your refund or remaining balance.
Step 11: Sign and File
Both spouses must sign if filing jointly. Mail or e-file the return following instructions in the booklet.
Common Mistakes and How to Avoid Them
- Incorrect residency dates — These drive the entire calculation; verify your move-in or move-out dates.
- Misreporting California-source income — Only income connected to California belongs in the CA column.
- Including wrong withholding amounts — Report only California state withholding, not federal or other states’ withholding.
- Using Short Form when ineligible — Higher income, itemized deductions, or extra income types require the Long Form.
- Head of household without Form FTB 3532 — Missing this schedule results in automatic denial of the status.
- Math errors in the effective tax rate — Double-check percentages and calculations or use approved tax software.
- Claiming estimated payments twice — Verify your account on MyFTB before completing payment lines.
What Happens After You File
The FTB processes e-filed returns in about 2–3 weeks and paper returns in 8–12 weeks. Refunds are issued by direct deposit or check, with direct deposit being the fastest option.
If you owe tax, payment is due by April 18, 2016, regardless of when you file. Interest and late-payment penalties accrue until the balance is paid. Payments can be made online through Web Pay, by credit card using approved vendors, or by mailing a check.
The FTB may contact you for verification if withholding amounts, estimated payments, or residency details do not match their records. Keep documentation for at least four years. If you later discover an error, file Form 540X within the allowable time to amend.
FAQs
I moved to California mid-year. Do I file as a resident or nonresident?
You are a part-year resident. Report all income earned while living in California plus any California-source income from the rest of the year on Form 540NR.
What counts as California-source income for nonresidents?
California-source income includes wages for work done in California, rental income from California property, California business income, and gains from selling California real estate. It excludes unemployment benefits and wages earned entirely outside California.
Can I use the Short Form if I worked remotely for a California employer?
Yes, if all work was performed outside California and you otherwise meet the eligibility rules. Wages are sourced based on where services are physically performed, not where the employer is located.
How do military servicemembers file?
Nonresident servicemembers stationed in California do not pay California tax on military pay. If they or their spouses have other California-source income, they must file Form 540NR. Publication 1032 explains these rules in detail.
What if my income is under $100,000 but includes self-employment or rental income?
You must use the Long Form 540NR. The Short Form is only for limited income types such as wages, taxable interest, unemployment, and Paid Family Leave Insurance.
Do I have to file if I lived in California only briefly?
You must file if your income meets the filing thresholds. Even brief residency requires reporting income earned during your time in California.
Can I e-file the Short Form?
Yes. E-filing is available and strongly recommended because it reduces errors and speeds refund processing.
For official forms and instructions, visit the California Franchise Tax Board: https://www.ftb.ca.gov.
