It depends. The key is 'Colorado (CO) source income'. If the employer is situated in CO then the answer is yes, each time the RSUs are vested then you would be liable for the income in CO. If the employer is not in CO, then you may only need to file your resident state return. Each state has their own tax rules.
Always prepare the nonresident return first and your resident state will give you a credit (in the future)
The credit for taxes paid to another state on the same income is used on your resident state because they do not want you to pay taxes twice on the same income. As the resident state all worldwide income must be included. The credit allowed is the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by the resident state
- When to file more than one state return.
When you are signed into your TurboTax account be sure to answer the question in the Personal Info section about income from another state. Then when you go to the State tab you will see the other state there for you.
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