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If a person lives in NH and works in MA, and normally apportions their state income, the information provided by TurboTax is wrong. See 830 MA Code 62.5A.3

TurboTax adds a note in two locations on the MA tax form that says "NOTE: You cannot apportion MA wages as shown on form W-2 when MA is in Box 15"  but that is ENTIRELY incorrect.   The same apportionment rules remain in effect from 2019.  See  830 Mass. Code Regs. 62.5A.3(3)(b)

(3) Massachusetts Source Income for Nonresidents Telecommuting Due to Pandemic-related
Circumstances.
(a) In General. Under M.G.L. c. 62, § 5A(a), income of a nonresident derived from a trade
or business, including any employment, carried on in the Commonwealth is sourced to
Massachusetts. Pursuant to this rule, all compensation received for services performed by
a nonresident who, immediately prior to the Massachusetts COVID-19 state of emergency
was an employee engaged in performing such services in Massachusetts, and who is
performing services from a location outside Massachusetts due to a Pandemic-related
Circumstance will continue to be treated as Massachusetts source income subject to personal
income tax under M.G.L. c. 62, § 5A and personal income tax withholding pursuant to
M.G.L. c. 62B, § 2.
(b) Apportionment Based on Days Spent Working in Massachusetts. Consistent with the
rule set forth in 830 CMR 62.5A.3(3)(a), a nonresident employee who, prior to the
Massachusetts COVID-19 state of emergency, determined Massachusetts source income by
apportioning based on days spent working in Massachusetts in accordance with 830 CMR
62.5A.1(5)(a), must continue to do so based on:
1. the percentage of the employee's work days spent in Massachusetts during the period
January 1 through February 29, 2020 as determined under 830 CMR 62.5A.1(5)(a); or
2. if the employee worked for the same employer in 2019, the apportionment percentage
properly used to determine the portion of employee wages constituting Massachusetts
source income on the employee's 2019 return. For example, if a nonresident employee
is working from home full-time due to a Pandemic-related Circumstance, but during the
period January 1 through February 29, 2020 the employee worked five days a week, two
of those days from an office in Boston and three of those days from home, 40% of the
employee's wages would continue to be Massachusetts source income.

Here's the URL to the law.  https://www.mass.gov/doc/830-cmr-62-income-tax/download  

I'm quite displeased at having to amend my return.  I pay TurboTax to avoid screwups like this.  Lesson learned.
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3 Replies
Hal_Al
Level 15

If a person lives in NH and works in MA, and normally apportions their state income, the information provided by TurboTax is wrong. See 830 MA Code 62.5A.3

If you meet apportionment rules (most commuters would not), then any allocation of W-2 income is done at the W-2 screen, in the federal section, not the allocation screens in the state program.  That is, you have to use a workaround in TT to compensate for your employer's mistake in not doing the allocation when issuing the W-2. 

 

"Massachusetts adopted a final version of the
previous emergency regulation which now says “all
compensation received for services performed by a
non-resident who, immediately prior to the
Massachusetts COVID-19 state of emergency was
an employee engaged in performing such services
in Massachusetts (emphasis added), and who is performing services
from a location outside Massachusetts due to a
Pandemic-Related Circumstance will continue to be
treated as Massachusetts source income subject to

personal income tax . . . and personal income tax
withholding.”

 

Reference: https://www.hodgsonruss.com/assets/htmldocuments/Telecommuting_5.22.20.pdf 

If a person lives in NH and works in MA, and normally apportions their state income, the information provided by TurboTax is wrong. See 830 MA Code 62.5A.3

Hi and thanks for the response.  

The information you pasted applies to people working remotely due pandemic circumstances.    If, prior to the pandemic, the employee already worked from home out of state on some regular schedule, those days are still eligible to be apportioned as they have been in previous years.   Hence the information on TurboTax is incorrect.  
Is that consistent with your understanding? 

Hal_Al
Level 15

If a person lives in NH and works in MA, and normally apportions their state income, the information provided by TurboTax is wrong. See 830 MA Code 62.5A.3

Q.  If, prior to the pandemic, the employee already worked from home out of state on some regular schedule, those days are still eligible to be apportioned as they have been in previous years.  Is that consistent with your understanding? 

A.  Yes.

 

Q.  Hence the information on TurboTax (TT) is incorrect?

A.  No.  You can't expect TT to know the W-2 is wrong.

 

I'm not specifically familiar with the TT MA software.  But, for the states I am familiar with, this is how you do it:

At the w-2 screen split the boxes 15-20 W-2 info into 2 lines. On the 1st line leave MA in box 15 but change the box 16 to the amount allocated to MA; leave the MA withholding in box 17. On the 2nd line put NH   in box 15 and the NH allocated wages amount in box 16; leave box 17 blank.  That should get TT to do the apportioning. 

 

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