I attended college in MA in 2020. I had earned incomes from both MA and TX. Texas doesn't have state income tax.
As a college student, am I considered as a non-resident for MA for state income tax purpose, or should I choose Resident (Form 1) or part-year resident (Form 1-NR/PY) or Nonresident and part year resident? (Due to the Covid, I got sent to Texas home by my college from March to Dec in 2020 anyway that I only lived in college in MA from Jan to March, 2020). How in TurboTax should I discern my income earned from Texas from MA taxation if I can be treated as MA resident? Right now Turbotax makes MA taxes all my incomes, both from MA and from TX.
Or MA gets the right to tax every income regardless of its source? I played with TurboTax software, it looks I am taxed more by MA if I chose non-resident than if I chose resident.
It depends. Per the State of Massachusetts, legal residence or “domicile” in Massachusetts requires both a physical residence in Massachusetts and an intention to make Massachusetts one’s home permanently or for an indefinite period of time, with no intent to return to a prior home.
If you are in Massachusetts solely for college over a relatively defined period of time, with an intention to return to Texas at the conclusion of your studies, you are not be deemed to be a Massachusetts resident. In this case, you would file a nonresident return in Massachusetts. If this is the situation, only allocate your Massachusetts sourced income to your nonresident return. The TurboTax state interview will let you indicate how much of your wages were made in Massachusetts. Example: If you made $10,000 in Texas and $10,000 in Massachusetts, you should enter $10,000 on your Massachusetts return because it is sourced in that state.
If you plan to stay in Massachusetts, you will file a part-year resident return. Part-year residents must file a Massachusetts Nonresident/Part-Year Resident Income Tax Return, Form 1-NR/PY. If this is the case, then you still will only pay tax on your Massachusetts wages.
Thank you very much. These are also what I thought in theory but I can't find a way to tell TurboTax part of the income was from Texas (not from MA source or I don't know how to). TurboTax just transferred all my incomes from Federal to MA state even after I tried to exclude my Texas income in the state interview.
Do you have a detailed steps in TurboTax Premier how can I exclude non-MA sourced income from MA taxation?
By the way, I had 1099-misc from Texas.
To allocate a portion of your wages, you will have to indicate that you made wages in another state in your Personal Information section and also add a nonresident return.
Please follow these steps in TurboTax:
- Open your return.
- Click on My Info on the left hand side.
- Confirm your Resident State is listed as Texas.
- Scroll down and under Other State Income, enter Massachusetts.
- Click continue.
- Click on State on the left hand side.
- Click Start next to your Nonresident Massachusetts return.
- Confirm Nonresident residency.
- Continue the on-screen instructions until you reach the page Non-Massachusetts Portion of Income. You will be able to enter your Non-MA portion. I have attached an example screenshot below for additional guidance.
- Click continue and follow the remaining on-screen instructions.
I think here is where I got lost:
On my 2020 TurboTax Premier, on the left I have Personal Info -> You & Your family, under which I don't see anywhere I can claim Texas as my resident state. In stead it has Mailing Address and Phone number where I have put down my home address in Texas. Is this an indication to TurboTax that Texas is my resident state?
In the next section Other State Income, I am able to select MA which is good.
The example you used is very good as I want to know how to handle W-2 from MA and 1099 from TX.
In the TurboTax Premier version, if you click on Personal Information, you will see Your Personal Info Summary. Click Edit next to your name. Under your Occupation, you will see your State of Residence.
In this box, please make sure you pick Texas in the drop down menu.
Texas has always been selected in the State of Residence under Your Info.
The next question under State of Residency is to confirm if I lived in another state in 2020 for which I selected No at this moment. Is this selection correct?
Yes, you would answer No to that question.
As stated previously, If you are in Massachusetts solely for college over a relatively defined period of time, with an intention to return to Texas at the conclusion of your studies, you are not be deemed to be a Massachusetts resident.
I am still having the same problem.
In summary with TurboTax Premier, I have already said my state of residence is Texas ever since I used TurboTax and I have selected MA under other state income - all these are under "Personal Info". When I go to the "State Taxes", I have MA listed which is correct. Looked to me Turbotax Premier doesn't have a place in to ask me which income was from which state. Your example showed there is a way to do so but I believe it was from a different version of the TurboTax software. Can you show me where in Premier I can do the same thing?