I retired a little over 2.5 years ago and have resided in Arizona since retirement. I was employed in New York when I earned nonstatutory stock options that I exercised during 2021. From my quick research, New York states that if you received the options while working in New York (I did), you owe state tax on the gain. Arizona states that if you live in Arizona when you exercise the options (I do), then you owe state tax. Must I pay tax to both states (double taxation), or do I only pay one state, and if one, which one?
How does the TurboTax program handle this situation? Thanks!
You will have to file a nonresident New York tax return first to report the income and pay their taxes on it. You can then file your Arizona tax return- you will have to also include the income because Arizona is your resident state, however, you will get a credit on the Arizona return for the taxes paid to New York.
You will see it in the state tax return section, look for Credit for taxes paid to another state.
You must prepare the nonresident state first so you will know how much to credit.
You will have to file a nonresident New York tax return first to report the income and pay their taxes on it. You can then file your Arizona tax return- you will have to also include the income because Arizona is your resident state, however, you will get a credit on the Arizona return for the taxes paid to New York.
You will see it in the state tax return section, look for Credit for taxes paid to another state.
You must prepare the nonresident state first so you will know how much to credit.