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If you live in New York but earn money in California, you may be subject to taxes in both states. Here's a general overview of how the tax situation works: 1. California taxes: As a non-resident, you'll typically need to file a non-resident California state tax return (Form 540NR) if you have any California-sourced income. You'll pay taxes to California for the income you earned within the state. 2. New York taxes: As a New York resident, you're subject to taxes on your worldwide income, which includes the money you earned in California. You'll need to file a resident New York state tax return (Form IT-201) and report all of your income, including what you earned in California. However, to avoid double taxation, New York usually allows you to claim a state tax credit on your New York state tax return for the taxes paid to California on the same income. This credit, called the Other State Tax Credit, helps reduce your overall state tax burden on your California-sourced income. Keep in mind that specific circumstances might affect your tax situation, and it's essential to review the tax laws for each state to ensure accurate filing.