Is your home state California or Arizona? If it is California, you will not need Form 309. The reason is because California and Arizona have a reverse credit agreement. Normally when you live in one state and work in another, both states are allowed to tax you. However, your resident state will allow you to claim a credit for the tax you must pay to the nonresident state for the income you earn working there, to reduce the effects of double-taxation.
With the reverse-credit agreement, the credit works in reverse: your nonresident state will give you a credit for the tax you pay to the resident state for any income you are earning in the nonresident state. If, therefore, you live in California, but work in Arizona, then you do not claim a credit on the California return. Rather, you will claim it on the Arizona return.
Of course, if you are living in Arizona, and working in California, then you will claim the credit using Form 309. In this case, the income that is subject to tax in the other state is the income you earned in California, because all of that income will be taxed in Arizona. And the amount of Arizona tax will be the amount of AZ tax that was withheld, plus any additional tax you must pay in or minus any refund you will receive. If you are claiming the credit on the Arizona return, the math is the same, but just switch out California for Arizona and vice-versa.
Feel free to post additional questions if you need further clarification.
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