I am preparing taxes for a friend who lives full-time in NYC but has a part-time fully remote job in Arizona (she's never set foot in AZ). She ALSO made money remotely in NY- the breakdown was 20% AZ income, 80% NY income. Does she need to file a state tax form for AZ? If so, does she need to declare her non-Arizona income? Does she have to declare her Arizona earnings on her NY state return?
Based on my research, I'm assuming 'yes' for both questions but will she get double taxed for the states?
Thanks.
Since your friend lives in NYC, she is required to file a NY state return and pay taxes to the state and NYC. As to AZ, it depends on how the company treats her. Take a look at her W-2 form, which state taxes were withheld? Does it say AZ or NY? If it says NY, the income might not be considered sourced in AZ, then she doesn't need to file an AZ state return. When in doubt, give the company payroll a call for clarification. If she is required to file an AZ state tax return and pay tax to AZ, she can claim a tax credit on her NY state return for taxes paid to AZ.
Since your friend lives in NYC, she is required to file a NY state return and pay taxes to the state and NYC. As to AZ, it depends on how the company treats her. Take a look at her W-2 form, which state taxes were withheld? Does it say AZ or NY? If it says NY, the income might not be considered sourced in AZ, then she doesn't need to file an AZ state return. When in doubt, give the company payroll a call for clarification. If she is required to file an AZ state tax return and pay tax to AZ, she can claim a tax credit on her NY state return for taxes paid to AZ.