Will my employer find out if I file a separate residential taxes? I work for a company in CA, but live in AZ.

[Anonymous]

 Will my employer find out if I file a separate residential taxes? I work for a company in CA, they allowed me to work from home. I have since moved to AZ.

I need to file as an AZ resident to get in state tuition rates for school (I must reside in AZ for at least a year). Can I file two returns? One for working in CA and one for living in AZ. 

Most importantly, will my employer find out about how I have filed? They do not know that I have moved. 

[ToddL]

Is your employer withholding CA taxes and not withholding AZ taxes?

[Anonymous]

Yes, they are withholding CA taxes. Not AZ taxes.

[ToddL · Accepted solution]

First, unless you advise your employer of your change in address (or they find out another way), they would not get any notification of that change as a result of you filing a tax return.

You would file your federal return and list yourself as a resident of AZ. The program will prompt you to prepare a resident AZ tax return.

Do not answer "Yes" to the question "Did you earn money in any other states?" If  you work from home in AZ,  you earned your money in AZ. 

When you enter your Form W-2 with CA income and CA tax withheld, the program should prompt you to prepare a non-resident CA return.  In the CA interview, allocate all your income to AZ; this would result in a full refund of any CA tax withheld.

[Anonymous]

Thank you for your answer, I had a couple of questions.

Will this effect the company's ability to employ me? I was told because CA employers have to pay Unemployment and other taxes on me as their employee, they would want to fire me because I am in AZ. (this is the main reason I want to keep it secret).

How will doing as you stated (Putting NO for making money in other states) effect how my CA employer handles things? I appreciate your help.

[ToddL]

Your CA company can hire anyone they want, no matter where they live. Intuit (CA company) hired me and I live in FL

They'd still be paying CA unemployment on anyone they hired to replace you, so they would not save anything by firing you.

Putting NO for making money in other states wouldn't have any effect on how your employer handles your payroll. That only affects how and where you file tax returns.

[Anonymous]

Thank you!