Does American digital nomad qualify for California Safe Harbor?

Question

Do I qualify for California Safe Harbor exemption?

I'm technically domiciled in California (I have a CA driver's license and a mailing address for banks, etc), but haven't been physically present in the state "for at least 546 consecutive days" (excepting a few short trips, amounting to less than 45 days per taxable year).

I've been employed the entire time, but the contract didn't specify that I had to move abroad (that was my own choice). So technically, I was not abroad because of "an employment-related contract" (I was just digital nomading), but I was in fact employed the whole time.

I guess I'm just confused about the wording of The safe harbor provides that an individual domiciled in California who is outside California *under* an employment-related contract.... Does that mean my employment contract must specify that I have to be abroad? Or does it just mean I just need to be employed during that time?

(I do not have an official out-of-US residence fwiw)

Answer 1

but haven't been physically present in the state "for at least 546 consecutive days" (excepting a few short trips, amounting to less than 45 days per taxable year).

So... you have been physically present in the State.

The 45 days exception is specifically when outside California for work purposes.

Does that mean my employment contract must specify that I have to be abroad? Or does it just mean I just need to be employed during that time?

Yes, it means that the contract requires you to leave the State. Read the first sentence:

Safe harbor is available for certain individuals leaving California under employment-related contracts.

Note also this exception from the safe harbor:

The principal purpose of the absence from California is to avoid personal income tax.

The FTB would very likely take the position that your "digital nomading" is specifically designed to avoid paying State taxes. The FTB would probably take this position even if the contract states that "work must be performed anywhere but California". You'll need to show that your digital nomading is necessary for the work you're doing.