Lived in AZ for 6 months
moved to different state but continued to work for AZ company
AZ continued to withhold AZ tax, not new state.
So what do I report to new state because I basically have not paid anything to new state?
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Even though state tax was not withheld in your new state, you will still need to file and pay tax to the new state. You will have also overpaid to Arizona, and will be due a refund of the amounts that are overpaid.
You should file your part-year returns in both states now. This will allow for time for you to receive your refund from Arizona in time to pay the amount due to your new state for taxes not withheld.
If you haven't done so already, be sure to have your employer update your withholding for 2020 so that next year things are a little easier for you!
Even though state tax was not withheld in your new state, you will still need to file and pay tax to the new state. You will have also overpaid to Arizona, and will be due a refund of the amounts that are overpaid.
You should file your part-year returns in both states now. This will allow for time for you to receive your refund from Arizona in time to pay the amount due to your new state for taxes not withheld.
If you haven't done so already, be sure to have your employer update your withholding for 2020 so that next year things are a little easier for you!
Okay
I went through the turbo tax questions for both states and divided up my income. Would I be correct to say that I do not take a credit for the AZ tax paid because I was not taxed twice, only once by Arizona. I have tried it both ways, with credit and without. The without credit seems more correct in my mind because the MA tax obligation is 700, but Im getting a 500 refund from AZ, so therefore I pay MA all of that AZ refund plus 200. If I take the credit, I still get 500 back from AZ but I only owe MA 200. So in the end I end up with a refund of 300. Which does not seem in my mind to satisfy my MA tax obligation. Unless the MA tax departed gets that money from Arizona themselves.
The process you should follow is:
Example: You earned a total of $10,000. 20% ($2,000) was earned while living in MA. All of the $10,000 is taxed in AZ because you worked there. $2,000 is taxed in MA because you lived there pat year. If your tax bill (not refund) in AZ was $1,000, you can claim 20% ($200) as taxes paid in another state for MA.
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