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Level 3
March 28, 2022
Question

Reporting AZ/ CA Income - Crypto Staking

  • March 28, 2022
  • 1 reply
  • 0 views

Hi guys,

 

I lived in California for the 2021 year then moved to Arizona in October.

I had worked remotely for the entire year for a job that does physical work in California.

Sold a home April 2021 in California.

I received crypto staking rewards the whole year.


Questions:

  1. Under the "State Taxes" tab, Turbotax is asking what is the “Arizona amount” but right next to it is the “federal amount”.  What is the “federal amount”?  I’m confused how turbo tax auto calculated this number.
  2. Under the "State Taxes" tab, for the "Arizona amount", does this include crypto staking that I earned while in Arizona?  
  3. For California State Taxes area on turbotax, it is asking all income from California “as if nonresident for the entire year”.  I’m confused as to what to calculate in this area.

Thanks

    1 reply

    Level 15
    March 29, 2022

    California does not tax remote workers so all the income while you earned as a California resident is taxed by CA and all income earned while living in Arizona is taxed by AZ.

     

    Arizona amount is the portion of the Federal amount earned while you lived in AZ.

     

    You should report crypto staking income earned in AZ if you reported that income on your federal return. Staking rewards may not be taxable if you did not sell, exchange or transfer your rewards. If you choose not to include your staking due to the Jarrett case, you should disclose your position on Form 8275 and keep documentation if the IRS questions the treatment.

     

    California income as a nonresident is California income you earned from CA when you did not live there, such as income from a CA rental property.

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    Fat DudeAuthor
    Level 3
    March 30, 2022

    Thank you Ernie for the reply 🙂

    Where is form 8275 on the turbotax program?  I don't see it under the listed forms.

    Thanks

    Level 15
    March 31, 2022

    IRS Form 8275 is not supported by TurboTax.

     

    Complete IRS Form 8275 and include with your paper-filed tax return.

     

    IRS Form 8275 Instructions are here.

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