Every American needs to file a federal tax return with the federal government. And if you live in California, you are required to fill out Form 540 for your individual state income taxes.

This makes sense. If you’re a resident of California, you’ll file a tax return and pay income taxes to the state.

But here’s what many people don’t know: even some California nonresidents need to file a return there. If you earned any income in California but live outside of it, you are required to file Form 540 NR with the California Franchise Tax Board.

This form allows the state to see the income from all of the nonresident’s sources. From here, the state then parses out the California tax on a ratio.

For any nonresident who wants to invest in California, this serves as a warning. If you live out of the Golden State but own property there, California would still like to see where every penny of your income came from. Perhaps this is another reason why people are hesitant to invest there.