Question

Must I pay AZ taxes on all income while overseas?

Forum|Forum|6 years ago
October 3, 2019
1 reply
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I moved away from AZ in Feb to a foreign country where I intent to stay indefinitely (moved family, sold vehicles, multi-year rental lease, new address, DL, etc.). I did however keep my old AZ home as a rental property. Furthermore I continue to be paid as a W2 employee of an AZ based company, but working remotely. I know I must file with AZ for rental and AZ sourced income for the start of the year, but isn't the remainder earned while domiciled in a foreign country excluded? Will I continue to have to pay the state on this money year after year going forward?

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Critter

Employee

You will file a part year resident return for 2019 and then a non resident return for 2020 and forward to only report the rental. Read up on how AZ taxes non residents :

If you're not sure, the best bet is to contact the Department of Revenue for Arizona, or visit their website. Most state websites have a section devoted to nonresidents and part-year residents.

Filing Requirements can be found in this Arizona Nonresident Personal Income Tax Booklet https://www.azdor.gov/Portals/0/ADOR-forms/TY2017/INDIV-F/FORMS_INDIVIDUAL_2017_140NR_Booklet.pdf

"You are subject to Arizona income tax on all income derived from Arizona sources. If you are in this state for a temporary or transitory purpose or did not live in Arizona but received income from sources within Arizona during 2017, you are subject to Arizona tax."

Income from Arizona sources includes the following:

• wages

• rental income,

• business income

• the sale of Arizona real estate

• interest and dividends having a taxable or business situs, in this state, and

• any other income from an Arizona source.

And according to the State of Arizona's Department of Revenue, "You have to file a tax return reporting any income earned in Arizona if you exceed the amounts listed in the filing requirements stated in the instructions of the Arizona income tax returns. If you do not meet these filing requirements but you have Arizona income tax withheld from your earnings, you will have to file an Arizona return to obtain a refund of the withholding tax paid."

You can find that information here as well https://www.azdor.gov/About/FAQs/Individual.aspx

NOTE: It's strongly recommend to prepare your nonresident state return before you prepare any resident or part-year state returns.

How do I file a nonresident state return?

https://ttlc.intuit.com/replies/3302052