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A few months ago I got a letter from the California Franchise Tax Board demanding I file a state income tax return for income that an insurance carrier reported to them I had received there in 2013. I do not live there, am not licensed there, and never received any compensation from any carrier for policies issued there in 2013. It turns one carrier mistakenly reported that I had received commission for med sup policies issued there and after working with the carrier to resolve the error a couple of weeks ago I got a letter from the state notifying me that the issue has been resolved and no further action was required on my part.
Beginning in 2015 I now do have a non-resident license in California and a few other states and have downline agents in a couple of non-resident states. My accountant tells me that I must file income tax returns in every non-resident state I receive commission in, assuming they have a state income tax, which I will do. He describes California as more aggressive than most at going after non-residents who earn income in their state, but that every state with a state income tax will expect a tax return for any earnings in their states.
I know a lot of agents here on the forum do med sup telesales across state lines but I've never heard any discussion of how you handle state income tax for your non-resident income. Are you filing returns in each state that has a state income tax? Ignoring the requirement and hoping the state won't come collecting? Unaware of the requirement?
Beginning in 2015 I now do have a non-resident license in California and a few other states and have downline agents in a couple of non-resident states. My accountant tells me that I must file income tax returns in every non-resident state I receive commission in, assuming they have a state income tax, which I will do. He describes California as more aggressive than most at going after non-residents who earn income in their state, but that every state with a state income tax will expect a tax return for any earnings in their states.
I know a lot of agents here on the forum do med sup telesales across state lines but I've never heard any discussion of how you handle state income tax for your non-resident income. Are you filing returns in each state that has a state income tax? Ignoring the requirement and hoping the state won't come collecting? Unaware of the requirement?