If I live in AZ, but work 4 days a week in CA, can I rent an apartment in CA without having to pay CA taxes?

[rjs · Accepted solution]

You have to pay California tax on the income you earn for working in California, whether or not you have an apartment there. You have to file a California nonresident tax return. You also have to pay Arizona tax on all of your income, no matter where the income is from. But you will get a credit on your California tax return for the tax that you pay to Arizona on your California income.

(The more usual arrangement when you live in one state and work in another is to get the credit from the state that you live in. But Arizona and California are "reverse credit states.")

[rjs]

Each state has its own definition of a resident, so it's possible to be considered a resident of more than one state at the same time. If Arizona is your home (your "domicile") I don't think that renting an apartment in California would make you a California resident. But you should review the rules for California residency to make sure. The California Franchise Tax Board has a publication that explains how to determine whether you are a California resident for income tax purposes, FTB Publication 1031, "Guidelines for Determining Resident Status." The publication also explains the concept of domicile, which is not the same as residence.