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I telecommute in Arizona but office is located in Denver. Both states deducted state taxes. Live in Arizona full time. Do we pay both states taxes?

 
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HelenaC
New Member

I telecommute in Arizona but office is located in Denver. Both states deducted state taxes. Live in Arizona full time. Do we pay both states taxes?

No, you should only pay income taxes to Arizona (AZ). If you live in AZ and work out of your home for the Colorado (CO) based company, you are a remote employee and you should only have to pay state income taxes to AZ. If your employer withheld taxes for CO, you will need to file a CO nonresident income tax return to get your money refunded. Click on  More info

Generally, you’ll need to file a CO nonresident state return if you made money from sources in a state you don’t live in. Some examples are:

  • Wages or income you earned while working in that state;
  • Out-of-state rental income, gambling winnings, or profits from property sales;
  • S Corporation or partnership income;
  • Beneficiary income from a trust or estate;
  • For active duty military: non-military income earned outside your state of legal residence.

You don't need to report interest income from an out-of-state bank account on a nonresident return.  It only needs to be reported on your federal and resident state return.

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