As a Massachusetts (MA) resident, 100% of income is taxable by MA regardless of where it is earned or sourced. So no, if you have New York rental income you can't exclude it on your MA tax return. The amount of New York rental income you have to report on you MA tax return is the amount of rental income reported on Schedule E of your federal tax return. There may be MA and/or New York adjustments for differences in how certain things are handled, like depreciation. Your MA return will have all of your income and deductions. You New York return will only have New York sourced income. If the New York rental property is your only rental property and there is no taxable rental income on your New York tax return or you federal tax return, then there shouldn't be any taxable rental income on your MA tax return.
Finally, even though both New York and MA will both tax any income from New York, MA will issue you a credit for tax paid to other states if you have to pay New York tax.
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