Two States on W2 (Worked in one state)

You can check with your employer to verify if your W2 is accurate. 

Some employers report wages earned for work for customers or programs in other states as income earned in those states. 

You can prepare a non-resident New Mexico state tax return in TurboTax to report this income and calculate any income tax liability to NM before your prepare your resident California state tax return.

I Have Two States Listed on My W2 - What Now?

Did you perhaps work in NM during 2020?  States can tax non-residents on income from working within their borders.

No, I did not work in NM ever. Only in CA.

If your employer mistakenly withheld NM taxes, you’ll have to file a non-resident NM return, showing zero NM income, in order to get those taxes refunded.

File zero with NM even if the W2 shows a dollar amount displayed?

Yes.  In this situation some taxpayers print and mail their return, along with a note explaining the discrepancy with the W2.  Even better would be a letter from your employer acknowledging their error.

Quick update all: my employer advised that the Payroll department moved over everything from NM to CA. I received two W2C's - one showing CA and one showing NM. The one in NM shows the corrected amount as $0.00. 

Do I need to file with NM like somebody had previously mentioned or can I just use the W2C for CA and file just that one?

You do not need to file NM.  The W2C corrects and negates the first one.  You have no income reported for New Mexico.

If the W2C for NM shows no NM tax withheld (Box 17 in the "Correct Information" column), then you need not file an NM tax return.