Hello. I retired 2 years ago at which time I moved our of California and am now a resident of Arizona. A high percentage of my current income comes from the exercise of non-qualified employer stock options that are still taxable by the state of California since I was employed there when they were earned.
Arizona and California have reciprocity, which in this case means that I pay taxes on those options in Arizona at their low rate (~ 4%), and then when California taxes those same options at their higher rate (12+%) they give me credit for the taxes I already paid to my resident state of Arizona. At least I think that is how reciprocity works!
I just finished entering my 2022 Federal tax input. In order for the reciprocity calculations to work properly within the TurboTax state tax modules, should I enter my Arizona (resident) state tax info first and then California (non-resident), enter California tax info first and then Arizona, or doesn't it matter?
