Live in New York, Work in Arizona: Which State Taxes Your Paycheck?
Answer
Two returns, one credit. Arizona has the first claim on wages earned inside the state and withholds accordingly. New York then taxes you as a resident on everything and gives credit for what Arizona already took, capped at what New York would have charged on that same income.
Last verified
Without an agreement between New York and Arizona, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Arizona figure is an input to the New York return, so completing New York first means doing it twice.
A New York resident taxed by another state on the same income claims the credit for taxes paid to other states on Form IT-112-R. The credit is capped at the New York tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · ArizonaForm 140NR
File the Arizona nonresident return FIRST — you need the Arizona tax figure before you can complete New York.
- 2Resident return · New YorkForm IT-112-R
File a New York resident return reporting all income, then claim the credit for tax paid to Arizona. The credit is capped at what New York would have charged on that same income, so if Arizona taxes it at a higher rate the difference is not refunded.
The two states, side by side
| New York | Arizona | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form IT-203 | Form 140NR |
| Credit for other-state tax | Form IT-112-R | Form 309 |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | New York State Department of Taxation and Finance | Arizona Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Arizona and working in New York gives:Both states — credit offsets the double tax.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: New York → ArizonaHome state only
- 1099 contractor: New York → ArizonaHome state, plus the client state if you work there
- Moved mid-year: New York → ArizonaTwo part-year returns
Other New York pairs
Questions people actually ask
I live in New York and work in Arizona. Which state takes the tax out of my paycheck?
Two returns, one credit. Arizona has the first claim on wages earned inside the state and withholds accordingly. New York then taxes you as a resident on everything and gives credit for what Arizona already took, capped at what New York would have charged on that same income.
Which state should my employer be withholding for?
Arizona. The wages are sourced to Arizona, so Arizona withholding is correct and there is no New York withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. New York gives residents a credit for tax paid to Arizona on the same income, claimed on Form IT-112-R. The credit is capped at the New York tax on that income, so if Arizona taxes it more heavily the excess is not refunded by either state.
How current is this?
The New York and Arizona rules on this page were last checked against New York State Department of Taxation and Finance and Arizona Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- New York State Department of Taxation and Finance — individual income taxaccessed 2026-08-07
- Arizona Department of Revenue — individual income taxaccessed 2026-08-07