Yes, you should enter what is on your W-2 for both states. Massachusetts (MA) will tax you on your full year wages because the income was from sources in MA. Oregon (OR) will tax you only on the income earned while you were a resident. Check your pay stubs for the accurate amount based on your move date.
No, due to the reason stated MA should have the full amount of wages and OR will have only the wages earned while you lived there. You will likely have the chance to adjust the income on each state return when you prepare them (see the images provided by @JamesG1).
MA Nonresidents and Remote Work
Non-residents are taxed on items of gross income from sources within the Commonwealth, including income derived from or connected with any trade or business, including any employment, in Massachusetts.
Credit for taxes paid to another state is allowed by a resident state when the same income is being taxed to another state. Your resident state does not want you to pay tax twice on the same income. The credit that is allowed will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
For OR you will be allowed a credit for the wages earned as an OR resident that are also taxed by MA. In your situation you will have to do some calculating.
- Take the income earned in OR and divide it by the total wages earned.
- Multiply this percentage by the total tax liability on the MA return.
- This will be the tax you paid to MA on the same income as OR.
- Look for this credit when preparing your OR return and enter the income and tax you calculated.
@deepgarg-iit
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