I'm working and living overseas almost entire 2016, and may continue to be there for several years. My family stay with me overseas. I don't have any property in US, but have a valid driver license of MA. I also keep a mail address there (my friend's address). Should I file MA state tax return or file as a non resident status and don't file any state tax return? Thank you.
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chengdu123, for federal purposes you are a resident and therefore foreign earned income exclusion applies as long as you have a foreign tax home and foreign earned incoem.
The state issue is diferent -- as a resident of USA you must have residency somewhere ( in my old foreign assignment days I knew a lot of people establish residency in states with no income tax -- a PO box and driver's license). However there are lot of ExPats that do not have any connection with any state. States generally find this a lucrative tax item -- because the earnings are often high and therefore many states do not recognize the exclusion. However, absent any specific directive from your home state, as a US resident alien and with no in-state sourced income, there is not much your state can do to require a filing. This is true especially if you do not intend to come back to your home state. If you are not a resident of a state they cannot tax your world income , just in-state sourced income. I would suspect though that if you have previously filed MA returns and now don't , they will send you a notice of non-filing. All you have to do is tell them that you do not live in the state anymore -- this will mean you will lose your driver's license and when you come back have to take the written test again. That is my view.
chengdu123, for federal purposes you are a resident and therefore foreign earned income exclusion applies as long as you have a foreign tax home and foreign earned incoem.
The state issue is diferent -- as a resident of USA you must have residency somewhere ( in my old foreign assignment days I knew a lot of people establish residency in states with no income tax -- a PO box and driver's license). However there are lot of ExPats that do not have any connection with any state. States generally find this a lucrative tax item -- because the earnings are often high and therefore many states do not recognize the exclusion. However, absent any specific directive from your home state, as a US resident alien and with no in-state sourced income, there is not much your state can do to require a filing. This is true especially if you do not intend to come back to your home state. If you are not a resident of a state they cannot tax your world income , just in-state sourced income. I would suspect though that if you have previously filed MA returns and now don't , they will send you a notice of non-filing. All you have to do is tell them that you do not live in the state anymore -- this will mean you will lose your driver's license and when you come back have to take the written test again. That is my view.
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