I live in NH and work for a MA-based company. I work from home in NH most of the time but go into the office in MA on occasion.
In previous years, payroll would withhold MA taxes as if I worked in the office 100% of the time, and I would get a large refund come tax time.
Partway through this past year, I estimated my NH/MA income allocation at 10% MA within the payroll system to reduce the refund I would receive. As a result, box 16 (MA state wages) of my W-2 is lower than the amount shown in box 1 (total wages). However, I only actually worked in MA 3% of the days, so box 16 still overstates the amount of MA income.
Question: How do I apportion my MA income reported in box 16 to reflect the true amount I worked in MA for my nonresident tax form? I usually apportion my full income amount by working days, which would be an apportionment ratio of .0340. Since the MA income in box 16 is already partially reduced, the apportionment ratio would be .1168. Do I just do the math on the .1168 to figure out the working days even though that number doesn't really reflect the "correct" number?
Yes, the ratio will work to determine the income earned for the days you physically worked in Massachusetts (MA). Take the days worked in MA then divide by the total days of work (do not count weekends or other days off, only working days). This should compare to your3% calculated and will be accurate.
Use that percentage times total wages to enter the wages earned in MA on your W-2. Keep your records to show how you arrived at your result. The key is to report what is required and employers make mistakes on the W-2s.