| Actually, you pay BOTH states, or at least claim the income in both states.
You will PAY the taxes in California, because that is where the money was awarded and hence deemed to be "earned" there.
You will also declare the income on your New York return, because that is where you live and you must declare ALL of your world-wide income on the state return where you live.
You then request a credit for the California taxes paid on the California income on the NY tax return. I suspect that the credit will effectively offset the NY tax on a dollar-for-dollar basis. | 
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