The California Franchise Tax Board (FTB) has issued an information letter stating that the wages earned by Canadian employees while working in California are subject to California personal income tax. The treaty between the U.S. government and Canada does not exempt such income. Also, since the employer employs persons who do not meet the reciprocal income tax privilege requirements for such employees to be exempt from federal taxation under Code Sec. 893, the income is not exempt through the operation of California Rev. and Tax. Code Sec. 17146. (California Franchise Tax Board Information Letter 2014-04, October 23, 2014, released June 2015.)
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