California Safe Harbor – Only for Working Expats
Safe Harbor does not cover non-working expats
The often-cited “Safe Harbor” for the California residents working abroad has a few wrinkles that are commonly misunderstood. Most importantly, the rule does not cover non-working expats. The 546 days outside of the US rule is in addition to the requirement that moving abroad should be employment-related. Self-employment qualifies as well. Safe Harbor does not cover retirees.
Retirees, however, are spared because they may claim non-residence status based on the complete severance of ties to the state and proved intent not to return to CA in the future.
If one gives up their California drivers license, closes bank accounts in CA, and surrenders their voters’ registration, they will have taken preliminary steps to challenge an FTB assessment, which may come sooner or later.
Whole Story at TFX.