Live in Texas, Work Remotely for a California Employer: Who Taxes You?
Answer
Your employer's state gets nothing, and neither does yours. Wages are sourced to where the work is physically done — Texas, which does not tax them — and California does not run a rule that would source your remote days back to it. No withholding, no returns.
Last verified
An employer's address is not a tax nexus for its employees. Working from Texas keeps the income Texas-source, and since Texas levies no tax on wages, the income lands nowhere at all.
What you file
There is nothing to file in either Texas or California on these wages. Your federal return is unaffected — the federal government taxes the income whatever the states do.
The two states, side by side
| Texas | California | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form 540NR |
| Credit for other-state tax | No income tax | Schedule S |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Texas Comptroller of Public Accounts | California Franchise Tax Board |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in California and working in Texas gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Texas → CaliforniaWork state only
- 1099 contractor: Texas → CaliforniaClient state only, if you work there
- Moved mid-year: Texas → CaliforniaOne part-year return — the state you moved to
Other Texas pairs
Questions people actually ask
I live in Texas and work remotely for a California employer. Which state do I pay?
Your employer's state gets nothing, and neither does yours. Wages are sourced to where the work is physically done — Texas, which does not tax them — and California does not run a rule that would source your remote days back to it. No withholding, no returns.
Which state should my employer be withholding for?
Neither. There is no state income tax to withhold on either side of this pairing, so a state line on your pay stub for Texas or California is an error worth querying.
Does my California employer's location alone create a California tax obligation?
No. California sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside California are a different matter — those are California-source income and can require a nonresident return.
How current is this?
The Texas and California rules on this page were last checked against Texas Comptroller of Public Accounts and California Franchise Tax Board on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Texas Comptroller of Public Accounts — individual income taxaccessed 2026-08-07
- California Franchise Tax Board — individual income taxaccessed 2026-08-07