I live in NY and work remotely for a Massachusetts based company, why am I filing and owing so much to Mass????

[ToddL99]

[Edited 14 Mar 21, 09:18 AM PST]

If you only lived and worked in NY during 2020, you are not subject to MA state income tax - you should not owe MA any tax.

If your employer withheld MA income tax, you will have to file a non-resident MA return in order to get a refund of MA taxes. In the income allocation interview of the MA state tax program, make sure you indicate that none of your income was earned in (or allocable to) MA.

Make sure you completed your Personal Info interview correctly:

• Select New York as your state of residence;  

• Answer "No" when asked if you "Lived in another state in 2020?" That question only applies if you changed your state of residence in 2020.  

• When asked if you "Earned money in another state?", answer "No" (you earned your money working in NY - your employer's location is irrelevant to this question).  

@TomD8

[TomD8]

Note that @ToddL99 's answer applies only if you never worked inside MA during the entire tax year.

[jemwa]

@ToddL99 

> When asked if you "Earned money in another state?", answer "No" (you earned your money working in NY - your employer's location is irrelevant to this question).  

Is this true even if my employer withheld MA taxes? It looks like this question determines whether or not a non-resident state return needs to be filed so it feels like I should answer 'Yes' in order to file a non-resident return for MA as also mentioned:

> If your employer withheld MA income tax, you will have to file a non-resident MA return in order to get a refund of MA taxes.

[SundayInSalem]

@jemwa  Did you work in Massachusetts in 2020 before moving to New York?

Massachusetts put in place temporary pandemic rules from 10 March 2020 to 13 September 2021 saying nonresident employees who worked in Massachusetts before 10 March 2020 are still subject to Massachusetts tax until 13 September 2021. (There is a court challenge to this).

This may be why your employer withheld Massachusetts income tax. I suggest discussing this issue with your payroll department.

For more info see Expiration of the Emergency Pandemic Income Sourcing Rules for Non-Resident Employees. The two examples on the page are very helpful.

Why do you owe so much to Massachusetts?

It’s possible you owe so much to Massachusetts because your employer reported all your wages as Massachusetts income but stopped withholding MA income tax after 13 September so there was no withholding for the last part of the year.

You can file a nonresident Massachusetts return to show that some or all of your income was non-Massachusetts to reduce the amount due – or get some or all of your withholding back as a refund.

Preparing a nonresident return in TurboTax Online

You can select a State to prepare a non-resident Massachusetts return even if you did not tell TurboTax that you ‘earned’ income in another state.

1. Select State in the left column
2. Continue past Let’s get your state taxes done right
3. Add Massachusetts as your state
4. TurboTax will transfer your federal information
5. On Confirm Your Massachusetts Residency, the screen should say Massachusetts Nonresident Tax Return. If not, Change Residency to Nonresident (Form 1 NR/PY).

[jemwa]

@SundayInSalem Nope, I've been working in NYC since before that date and since I moved at my convenience my employer explicitly told me that they will continue to withhold MA taxes. According to the NY gov site this seems fine since my employer doesn't actually do any business in New York (https://www.tax.ny.gov/bus/wt/whtax_require.htm)

> Out-of-state employers who are not incorporated or licensed under New York State law and do not maintain an office or transact business in New York State are not required to withhold New York State, New York City, or Yonkers income taxes on employees who reside in New York State.

But thank you for the information-- I was able to both answer 'No' to income earned in another state as well as manually add Massachusetts as an additional state and TT automatically selected the Non-resident form based on my address.