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I worked for the same California-based company in 2018, working remotely from home. I am a 1099 employee, so my employer does not withhold any taxes. I lived in California for six months, then moved to Arizona. Do I need to file state taxes in both California and Arizona for the money I earned in each state, or should it be based upon where the company is located in California?

  • When you moved to Arizona, did they start withholding Arizona state income tax from your paycheck? – Ben Miller Jan 6 at 23:03
  • I should have clarified! I am a 1099 employee, so they are not withdrawing any taxes from my paycheck. Thank you for the questiohn! – Patricia A Ellsworth Jan 6 at 23:50
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    And to clarify for you, a “1099 employee” is not truly an employee. You are self-employed with your own business. – Ben Miller Jan 7 at 0:34
  • Have you been paying your estimated taxes? AFAIK states with income taxes require them and you obviously need to file a return to claim any possible refund back. – pboss3010 Jan 7 at 13:33
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    Since you are a ''business'' I would think you have to pay taxes in both states. On paper the company for which you work is not your employer but a business client. As a business you have to pay taxes to the state where you are working (well at least in my country, correct me if I'm wrong for USA). IMO you should pay taxes to both California (6 months) and Arizona. I suggest you give a call to the IRS or an accoutant. – Gainz Jan 7 at 18:56
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California has a tax form (540NR) for "non-residents and part-year residents". Arizona appears to have something similar. You will file this form instead of the usual full-time resident's for for each state and it will include the calculations needed to apportion your income between the two states.

For CA the last time I did this (many years ago), they basically figured your tax rates based on your full-year income, then collected taxes only on the part of the year when you lived in CA. But be careful, CA is very aggressive about income tax and might, for example, want to know if you came back to CA even for a day or two after moving.

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