The normal MA law states that you file a tax return in MA if you have MA source income. The COVID ruling mentioned above states that even if your were not in MA, you had MA source income, and are still subject to MA taxes.
As @Mike9241 said, only if you have a MA liability, can you file for a credit. IF your income is MA source, then you will have MA tax liability used to create a credit for your resident state.
Here's the key to determine which is right: Is your employer based in MA only? If your employer also has a MD location, then you can file MA and get a full refund and they can withhold the MD instead.
Once your determine if your income is MA based, then you can file MA correctly. Once MA is determined, you can file resident state based on that outcome.
If your employer is MA based, file MA with income and tax liability then file resident state with a credit for taxes paid to MA.
You will need to prepare the states in a special order. You may need to delete both states and begin again.
- First, prepare your non-resident return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
- THEN prepare your resident state return and it will generate a credit for your income already being taxed in the non-resident state.
- The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.
It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.
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