DanielV01
Expert Alumni

Investors & landlords

It is correct.  California and Arizona are reverse credit states.  In this case, California taxes all of your income, and then you claim a credit on the Arizona return for taxes paid to California on the rental income.  You will still file both states, but you will prepare the California return first, and then the Arizona return.  You will have a screen that will allow you to claim the credit for California taxes on your Arizona return.

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