Is a California form 592-B determinative that the reported income is California source income?
I'm looking over the 2013 and 2014 returns for a prospective client. She is a long-time Arizona resident. In 2013, she went to California and worked on a W-2 for a California company for a couple of months. At the end of that 'trial' period, she returned to Arizona and has worked for that same company as an independent contractor, doing her work remotely from Arizona. For both years, she filed all income on her federal return. She filed as a resident of Arizona and reported all income there. She filed as a nonresident of California and reported only the W-2 income for 2013. She receives both a 1099-Misc and a CA 592-B. The 592-B shows significant withholding of CA (only) tax, with the Independent Contractor box checked in Part II.
It appears to me that this income is California sourced income and she should be paying CA tax on it minus a credit for taxes paid to Arizona on the same income.
Can a California pro tell me if I'm on the right track?