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State tax filing
However what I just learned much to my dismay after overpaying Massachusetts taxes for 14 years is that if you work for a Massachusetts company, but do not physically work in Massachusetts all the working days of the year your income from your Massachusetts employer is only Massachusetts source income for the days you were physically working in Massachusetts. And you only owe taxes on the percentage of your income you were physically in Massachusetts.
From the Code of Massachusetts regulations:
830 CMR 62.5A.1: Non-Resident Income Tax Section 5 Rules for Allocation or Apportionment of Income ...
Example (5)(a)(1.2). A telecommuter works for a Massachusetts firm, mainly out of her home in Ohio. The telecommuter works a total of 240 days during the tax year, and is in Massachusetts on 60 of those days. Her salary is $120,000 per year. Her Massachusetts source income is $30,000, calculated as follows:
$120,000 x (60/240) = $30,000
The tax program I have been using "knows" I live in NH, "knows" I work in MA, but never asked me the number of days I am physically in MA. Unfortunately my employer never made this calculation either, so I am out of luck for the first 10 years I was paying full MA income tax on my total salary. The tax program just uses the state income your employer puts in your W-2. Who would have thought to question the number the employer puts in your W-2? Not me, it seems it could have been a simple fix for the program to ask the number of days you are physically working in Massachusetts. It sounds as if TurboTax relies solely on your w-2. I think they should ask about where you spend your working days - at least as an alert before you complete your taxes.