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Owe taxes in CT where I work, yet got money back from MA where I live.

Why do I owe? I thought I wasn't supposed to owe taxes for the state that I work in, just the state that I live in, so I don't understand why I owe money to CT when I live in MA.

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3 Replies
Vanessa A
Expert Alumni

Owe taxes in CT where I work, yet got money back from MA where I live.

In general, your home state will tax all in come from all sources.  What you will do is you will file a nonresident return for the states that you do not reside in, but you visit for work and earn money in.  When you file, you will fille out your nonresident states first.  Then you will fill out your resident state, claiming a credit for taxes paid to the nonresident states on your home state return.  You may or may not still end up owing money to your resident state depending on whether or not their tax rate is higher or lower than your nonresident state.  If the non resident state had a higher tax rate than your resident state, your credit will be limited to the amount of tax you would have paid to your resident state.  They will not give you a refund of the taxes you paid to the nonresident state. 

 

 

Multiple States

File Non Resident State Return

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Owe taxes in CT where I work, yet got money back from MA where I live.

I did file a nonresident form for CT first. I don't remember seeing any option to claim a credit anywhere. I ended up getting $450 back from MA, and then owing $1250 to CT. That doesn't make sense to me at all. How could it be THAT different?

JotikaT2
Employee Tax Expert

Owe taxes in CT where I work, yet got money back from MA where I live.

When you look at your W-2 form, under box 15, which state does it list for wages and state withholdings?  If your employer reported the wages as only being from Massachusetts (MA), you probably did not have anything withheld from Connecticut (CT).  Or if they only reported wages from MA, then the income earned in CT might not have had any taxes withheld at all.

 

You need to file a nonresident CT tax return if you had any CT income tax withheld or if you met the CT sourced income that meets the gross income test.  Since you worked in CT, you would have met the gross income test assuming you worked there all year.  Please see this link for more information.

 

For Massachusetts, you are required to report income earned everywhere.  Then you would be entitled to a credit on your MA state return for the income taxed twice, once by Connecticut, then reported again in MA.  But the income reported in MA is offset by the credit for taxes paid to Connecticut.  

 

Please review your return for Massachusetts and see if your copy includes an amount on Line 30 of your Form 1 from Schedule OJC.  You should see an amount here for state credit for income tax paid to other state as well as Schedule OJC included in your filing copy.  If you don't see anything on this line or if the form is not included, you may need to file an amended state return to ensure you receive the proper credit on your resident state return.

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