How do I calculate the "Part 1, Business, Col D" for SCHEDULE R/NR?????????

[tassonej]

in a Massachusets filing????

[Olivia342]

For Schedule R/NR in Massachusetts, “Part 1, Business, Column D” refers to the Massachusetts-source income allocated to the entity. To calculate it:

1. Start with federal business income (profit or loss from Form 1120 or 1065).

2. Apply Massachusetts adjustments: add back non-deductible items and subtract exempt income.

3. Allocate based on apportionment if the business operates both in and outside MA:

   • Use the sales factor, property factor, and payroll factor (or single sales factor if elected).

   • Multiply federal business income by the Massachusetts apportionment percentage.

The resulting amount is entered in Part 1, Business, Column D.

💡 Tip: Massachusetts Form 355 or 355S instructions include a step-by-step example for Part 1 and Column D.

If you want, I can draft a super simple formula-style version for quick reference when filling out the form. Do you want me to do that?

[KarenL · Accepted solution]

The amount for Part 1, Business, Column D on the Massachusetts Schedule R/NR Is to determine what portion of your business income is derived from Massachusetts sources, while you were a nonresident of the state.

If you were a nonresident the entire year, you'll need to determine the income, or net profit, received from MA sources. This can be a percentage of the total business income. Your recordkeeping should show the amount. If not, you can trace back to income received and the sources.

Here are the detailed steps to determine the share of your business income attributed to Massachusetts during your Nonresident Period:
1. Calculate the full amount of business income or loss you earned while residing outside Massachusetts.
2. Determine how many days you were physically present or worked for your business in Massachusetts throughout this timeframe.
3. Calculate the total number of days worked for the business during your Nonresident Period, no matter where the work occurred.
4. Divide the number of days you worked in Massachusetts (from Step 2) by the total work days (from Step 3). This will yield the ratio for income sourcing to Massachusetts.
5. Multiply your total business income or loss (from Step 1) by the sourcing ratio (from Step 4). The result will reflect the portion attributable to Massachusetts

If you know the amount and just need to get a percentage, the business income is typically found on Schedule C, or line 3 of Schedule 1 of your Form 1040. Or it could be from a Schedule K-1 (for a Partnership or S-Corporation). 

And here is a link to the form so you can see how it flows.