I live in PA and work remotely for employer in MA... Taxes?

[roni1]

I was living and working in PA up until May, and then changed jobs in the middle of the pandemic to work for an employer in MA.

I have been staying in PA and working remotely the entire time that I've been employed with the MA company. I have set foot in MA twice for a total of 6 days.

My paycheck deductions are all going to PA and my local community. Nothing is going to MA. Am I supposed to file an MA state income return?

[Hal_Al]

Q. . Am I supposed to file an MA state income return?

A. No, since you do not physically work in MA, you have no MA source income*. 

If you occasionally make business trips to MA, you may be required to file a MA non-resident return,  but "nobody" does. See http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/  If you live in a state without an income tax (e.g. FL or TX), it’s more likely you should file in the business trip work states. You can't use the "it all comes out even" rationale for not filing.

*For others reading this be advised that  New York, Pennsylvania, Nebraska, Delaware and New Jersey have different rules for telecommuters working for companies located in those states. For guidance see: http://www.journalofaccountancy.com/issues/2009/jun/20091371.html

[TomD8]

@Hal_Al is correct regarding the fact that MA taxes non-residents only on earnings from work actually (physically) performed inside MA.  Work performed remotely in PA is not MA-source income.

Here is MA's law regarding non-resident filing requirements:

"If you're a nonresident of Massachusetts, you must file a Massachusetts Income Tax Return if you received Massachusetts source income in excess of your personal exemption multiplied by the ratio of your Massachusetts source income to your total income, or your gross income was more than $8,000 – whether received from sources inside or outside Massachusetts."

https://www.mass.gov/guides/personal-income-tax-for-nonresidents

[roni1]

"No, since you do not physically work in MA, you have no MA source income"

I believe this may have changed this year: 

https://www.bostonherald.com/2020/08/27/massachusetts-continues-income-tax-for-remote-workers-amid-p...

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

[TomD8]

@roni1 Apparently the new regulation you referred to is  in "proposed" status. 

Section 5A, Chapter 62 of current Massachusetts law states

(emphasis mine):

"Items of gross income from sources within the commonwealth are items of gross income derived from or effectively connected with: (1) any trade or business, including any employment carried on by the taxpayer in the commonwealth, whether or not the nonresident is actively engaged in a trade or business or employment in the commonwealth in the year in which the income is received;..."

The proposed regulation appears to apply to taxpayers who normally work in MA, but are working out of state temporarily due to Covid.