It depends. Per the AZ form 309 instructions: https://azdor.gov/file/6762/download?token=DPQXB2FW
Complete this form only if you meet the following:
- You are filing a 2018 Arizona income tax return.
- You paid a net income tax to another qualified state or country for 2018.
- If you are claiming a credit for taxes paid to another state, payroll taxes withheld from income do not constitute a net income tax. Having tax withheld from your pay by Arizona and another state does not by itself qualify you for this credit. You must file a net income tax return to the other state.
- If you are claiming a credit for taxes paid to another country, a net income tax paid to another country includes those taxes that qualify for a credit under Internal Revenue Code (IRC) §§ 901 and 903.
However, TurboTax primarily determines which state tax returns you need to file based on what you enter on the My Info tab in TurboTax Online or PERSONAL INFO tab in TurboTax CD/Download and related income sources, i.e. W-2. Typically, a credit for taxes paid to another state is claimed on the resident state tax return for double-taxed income on the nonresident state tax return. Typically, if you have part-year resident state tax returns, you should allocate income on each state tax return and you would not have double-taxed income. You should allocate income and complete nonresident state tax returns first (if applicable), part-year resident state tax returns second (if applicable), and resident state tax returns last (if applicable). Please review the following link(s) and the link(s) embedded on the webpage(s) for more information:
