Do you actually have a tax liability for NY? If you are working remotely and never step foot in the state of NY, then there is a chance, you should get all of the taxes withheld for NY back. Although NY is a Convenience of the Employer state, if you did not live in NY or you do not go to NY to work and your employer requires you to have a home office because they do not provide you with an office, you would not need to pay taxes to NY. In this situation, you would need to file a NY nonresident return listing your NY income as $0 so you can claim a refund for all the withholdings. Then you would file your AZ return reporting all income you earned. You would then have to pay AZ since you had no withholdings paid to AZ. If this is the case, then you should also contact the payroll department for your company and have them update where your withholdings are paid to.
If for some reason you do not meet the convenience of the employer rules, (ex. you lived in NY while working for the company and then in July, you moved to AZ and they allowed you to keep your job and set you up to work remotely) then you would need to file a NY Non-Resident first, then file your AZ return reporting all income for the time you lived in AZ on your return and then claiming a credit for the taxes paid to NY on your AZ return. You would need to file NY first so you know the tax liability you have with NY. This does NOT mean that you will not owe AZ anything. If the tax liability on the NY return is less than what you would owe AZ then you would still owe AZ some money.
You can also click on the link below to see if you meet one of the primary factors , or at least 4 of the secondary factors and 3 of the other factors. If you do, then you would not need to pay the NYS nonresident taxes and you would only pay AZ.
New York Tax Treatment of Nonresidents and Part-Year Residents
Application of the Convenience of the Employer Test
to Telecommuters and Other
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