Is foreign income from non-resident aliens exempt from Massachusetts taxation?

[gracefulcrayfish]

Hi everyone

I have a question about the Massachusetts state tax on income not related to US sources. My situation is the following: I arrived last year in the US on a J-1 visa and I am considered a non-resident alien for federal tax purposes. I am however a part-year resident of Massachusetts because I have lived there for over half a year.

As a Belgian citizen who lived in Switzerland prior to moving to the US, it seems that my US income does not fall under a tax treaty. However, as a non-resident alien, I still don't pay FICA taxes, but I am taxed on my US-based salary for both federal and state taxes.

I own a house in Belgium that I am renting out because I no longer live there and I also have some stocks that I have sold. These are non-US-linked income, so they are not taxed at the federal level, but I could not find any information on whether such non-US income is reportable for the MA state tax for someone who is a resident of the state, but a non-resident at the federal level?

[JotikaT2]

If you are in the United States on a J-1 Visa, you will need to file a federal tax return if you have income from U.S. sources from a job, specifically on Form 1040-NR.  Please see this link for more information on federal filing requirements for nonresidents.  Please note income from Massachusetts is considered to be from U.S. sources.

You would only need to report income from U.S. sources on a nonresident return.  This link has a great summary of what you would need to include as far as the source of the income.  Massachusetts would follow the same procedure as the IRS.  Only income from U.S. sources would be included on your state return.  Please see this link from Massachusets as it relates specifically to the income that would be taxed within the state.

Please be aware you would not be able to use TurboTax to prepare your returns, but you can use Sprintax to prepare your nonresident returns.  Please see this link for more details on how to file your tax returns.