Yes, you should have filed a return to obtain a refund for the taxes withheld and sent to CO. And no, it will not trigger an audit merely because you filed an amended CO return to obtain a refund of taxes withheld.
You don't pay taxes when you receive a NQSO. Thus, if you were a resident of CO when you received the NQSO, you would not owe any tax to CO based on the receipt of the options. However, when you exercised your non-qualified stock options and purchased the stock, the difference between the stock price and the strike price of the option is taxed as ordinary income. This income is usually reported on your paystub.
Upon exercise, you would owe tax to your resident state but no CO because it appears you were no longer a resident there. Therefore, you may want to file an amended CO return for the year in question to obtain a refund of the taxes withheld.
@KGunnIT
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