Investors & landlords

No, it is not excluded from your resident state return of MA. Your resident state requires all worldwide income to be included in your state return. If you have taxable income from another state, as in your situation with rental real estate in VT, then your resident state will give you a credit so that you are not paying tax on the same income twice. In your case there will be no credit because, as you indicated there is an overall loss on the rental.

It appears you are required to file the VT return based on 'Gross Income'.

• Who Should File VT?  You must file an income tax return in Vermont:
• if you are a resident or part-year resident of Vermont, or a nonresident but earned Vermont income, and
• if you are required to file a federal income tax return, and
• you earned or received more than $100 in Vermont income, or
• you earned or received gross income of more than $1,000 as a nonresident. See 32 V.S.A. § 5861 and § 5823(b) (1-6) for information on sources of income.