If you want TurboTax to automatically do the needful ( i.e. to recognize the credit for taxes paid to a non-resident state ) then the easiest way is to do the Non-Resident State first and follow that with the resident state. I That is the standard and recommended way. If you have already prepared the state returns, you may have to delete both the returns and re do them. I don't know for sure but it is possible that if you delete the CA return and do it again, TurboTax might pick up the credits from the AZ and you would be OK Try this first before taking the more drastic step of deleting both and redoing everything.
I cant see which version of TurboTax you are using ( ON-line Vs. downloaded/CD version. If the latter , because you have the forms mode available, it is possible to make the changes on the actual worksheets -- thus avoiding the "delete & re-do " scenario.
Good luck
