Donald is an Oregon resident, but commutes daily to work in California. His only income was $45,000 in wages from his job in California. He is not sure if he needs to file a return for both states. When he prepared returns to check out his potential tax liability, he estimated he could owe $2,600 tax to California and $2,100 tax to Oregon. Which of the following is correct?

1. He will take credit on his California non-resident return for the tax he pays to Oregon

2. He will take credit on his Oregon return for the tax he pays to California

3. He cannot take credit on either State because there is no reciprocal agreement between Oregon and California

4. He does not need to file a California return because he is an Oregon resident