I live in NH but work in MA. Do I still file MA state taxes and possibly get a refund?

[DanielV01 · Accepted solution]

Yes.  You will need to file a Massachusetts nonresident return for any income you earned working in Massachusetts.  You will receive a refund if the amount they withheld from your check is greater than the amount of actual tax you are responsible to pay to MA.  (You are not required to file a NH return since NH does not tax this kind of income).

[mdanjali]

Hi

I Live in NH but work at MA. My employer is withholding state tax apart from my income tax and fica.Will i be able to file a non resident tax at the year end?

[mdanjali]

And what do you mean by the actual tax i am responsible to pay to MA?do i have  obligation to pay any state tax to MA if i work here?

[TomD8]

MA can tax any income you make from working in MA, regardless of whether or not you are an MA resident.

[DanielV01]

As TomD8 mentions, Massachusetts does tax income you earned in Massachusetts.  If you were living in a state that also has a state income tax, that state would give you a credit on their tax return for the amount of tax liability you have in Massachusetts.  But, since you live in NH, a state without its own state income tax, they will not provide you with such a credit.  Instead, you will file a Massachusetts Non-Resident tax return.  You may get some refund of income tax when you do, but it is very unlikely that you will be fully refunded all of the MA withheld tax.

[CaroGray]

However what I just learned much to my dismay after overpaying Massachusetts taxes for 14 years is that if you work for a Massachusetts company, but do not physically work in Massachusetts all the working days of the year your income from your Massachusetts employer is only Massachusetts source income for the days you were physically working in Massachusetts.  And you only owe taxes on the percentage of your income you were physically in Massachusetts.

From the Code of Massachusetts regulations:
830 CMR 62.5A.1: Non-Resident Income Tax Section 5  Rules for Allocation or Apportionment of Income ...

Example (5)(a)(1.2). A telecommuter works for a Massachusetts firm, mainly out of her home in Ohio. The telecommuter works a total of 240 days during the tax year, and is in Massachusetts on 60 of those days. Her salary is $120,000 per year. Her Massachusetts source income is $30,000, calculated as follows:

$120,000 x (60/240) = $30,000

The tax program I have been using "knows" I live in NH, "knows" I work in MA, but never asked me the number of days I am physically in MA. Unfortunately my employer never made this calculation either, so I am out of luck for the first 10 years I was paying full MA income tax on my total salary.  The tax program just uses the state income your employer puts in your W-2. Who would have thought to question the number the employer puts in your W-2? Not me, it seems it could have been a simple fix for the program to ask the number of days you are physically working in Massachusetts. It sounds as if TurboTax relies solely on your w-2.  I think they should ask about where you spend your working days - at least as an alert before you complete your taxes. 

[TomD8]

@CaroGray --

You probably know this already, but Massachusetts gives you 3 years from the due date of the original return to file an amended return.  If you have some record of your days worked in NH, you could potentially obtain a refund of the excess MA taxes paid over the past 3 years.

[crisnmarkt]

MA created law pertaining to COVID-19,

https://www.mass.gov/regulations/830-CMR-625a3-massachusetts-source-income-of-non-residents-telecomm...

The State of NH attempted to challenge in court.

https://www.supremecourt.gov/DocketPDF/22/22O154/1635[phone number removed]1204330_New%20Hampshire%2...

Make sure you understand how this impacts your taxes as a non-resident.