Although some web sites appear to refer to "reciprocity" between CA and AZ, that doesn't appear to be true.
What's going on is a reverse (or "contrary") credit. In most states, the resident state gives a credit, on the state tax return, for any tax paid to a non resident state. CA & AZ have an agreement for the reverse; the non resident state gives you a credit for tax paid, on the same income, to your resident state. Recognizing this, AZ exempts CA residents from withholding, but CA does not. An AZ resident working in CA will have to wait for a refund on his non resident CA return.
