But what if the employee is a nonresident who never has to set foot in California to perform his services? Then the source rule works in the nonresident’s favor, even if the employer is California based. Remember, the source of the services is the location where the employee’s work is actually performed, not the location of the employer. A nonresident programmer who monitors and upgrades satellite dish software for a Los Angeles-based media company, all while sitting comfortably in front of his computer in his Austin, Texas condo, doesn’t earn California-source income and doesn’t have to pay California income taxes.. 1point3acres.com