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Level 1

My wife and I live in MA, she works solely in CT, and I work solely in MA. Her employer only withheld MA state income taxes. How do we file without being double taxed?

Details: we file federal and state jointly (even state because she gets a MA W2 since her employer withholds MA income taxes instead of CT). According to MA website, the employer must withhold and pay taxes to the “work state” (CT). According to CT website, she must file a 1040NR/PY return and file married filing separately. When we go to do this, she owes a significant amount to CT because there’s no where to show taxes were paid to MA. When in reality she should be getting some sort of credit, or more accurately put... taxes should be paid to CT and if MA taxes are higher then MA should give a credit and receive the difference. 

How do we know what portion of her MA withholdings were paid to CT by her employer? How do we file the 1040NR/PY for CT without being double taxed?

6 Replies
Level 7

My wife and I live in MA, she works solely in CT, and I work solely in MA. Her employer only withheld MA state income taxes. How do we file without being double taxed?

Your wife would need to file a Connecticut Non-Resident return, since she earned income there. 

Whatever amount of tax is due on that income, in that interview indicate that the tax amount was paid to Massachusetts, so there should be no tax due to CT.

More info:

https://portal.ct.gov/DRS/Individuals/Individual-Tax-Page/Nonresidents-wCT-Source-Inc


Edited 4/15/19 11:24 am 

Level 1

My wife and I live in MA, she works solely in CT, and I work solely in MA. Her employer only withheld MA state income taxes. How do we file without being double taxed?

Thank you for your reply... but again CT says she must file a non-resident part year return. See <a rel="nofollow" target="_blank" href="http://www.ct.gov/drs/cwp/view.asp?a=1462&q=266284">http://www.ct.gov/drs/cwp/view.asp?a=1462&q=2662...>

However, MA contradicts this by saying her employer should be withholding enough taxes to pay the “work state”. See “issue 1” and “directive 1” <a rel="nofollow" target="_blank" href="http://www.mass.gov/dor/businesses/help-and-resources/legal-library/directives/directives-by-years/1...>
Level 1

My wife and I live in MA, she works solely in CT, and I work solely in MA. Her employer only withheld MA state income taxes. How do we file without being double taxed?

Any updated response to this thread?
Level 11

My wife and I live in MA, she works solely in CT, and I work solely in MA. Her employer only withheld MA state income taxes. How do we file without being double taxed?

It's surprising that the employer did not withhold CT tax. No portion of MA withholding is paid to CT.

You normally complete the state tax return for the non-resident state first. Then on your MA return, you get a credit for tax paid to CT.




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Level 1

My wife and I live in MA, she works solely in CT, and I work solely in MA. Her employer only withheld MA state income taxes. How do we file without being double taxed?

I agree it’s surprising. Last year we had a penalty to pay to CT but received credit/refund from MA. Not sure if she needs to fill out W4 for both states or just CT. Ironically CT and MA tax preparers act like we’re the first to have this tax situation.
Level 11

My wife and I live in MA, she works solely in CT, and I work solely in MA. Her employer only withheld MA state income taxes. How do we file without being double taxed?

I'd recommend a W4 for both states, so that the proper amount is withheld.