- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
State tax filing
If you've abandoned your home in CA and established your new main, permanent home (your domicile in tax terminology) in AZ, then for 2020 you will file as a part-year resident in each of the two states.
Once you become a resident of AZ, AZ can tax all your income from that point on, regardless of where you earn it. CA can only tax non-residents on income from work actually (physically) performed inside CA ("CA-source income"). CA cannot tax a non-resident on work performed outside CA. (There is an exception if you are paid as an independent contractor rather than as a W-2 employee.)
You become a resident of AZ for tax purposes when you begin living in your new domicile in AZ.
If you have CA-source income after becoming an AZ resident, that income will be taxable by both states. But you'll be able to take a credit on your CA return for the taxes paid to AZ on the income taxed by both.
You should ask your employer to withhold AZ taxes from your pay. That's because all of your income after the move will be taxable by AZ. If your employer cannot withhold AZ taxes for you, you may want to begin making quarterly estimated tax payments to AZ.