k-1 income - which state should I file

[ls881]

I live in California and work full time remotely for a company in Massachusetts. The company in MA set up an office / branch in CA in year 2021, so now I count as an employee in our CA office. The main office issued me a K-1 form for year 2021 (using the MA employer's state ID number). In this case, do I need to pay taxes for the amount on K-1 for both MA and CA, or only CA? Thank you. 

[ErnieS0]

It depends on what the K-1 was issued for. I’m assuming you received a K-1 because you were a partner before you become an employee.

Massachusetts says a pass-through entity that earns or derives income from sources both within Massachusetts and elsewhere must either allocate or apportion the income to determine the amount of Massachusetts source income of its non-resident members.

Your post did not say anything about what type of work you did or what type of interaction you had with the Massachusetts office and clients in the state.

Rules for Allocation or Apportionment of Income to Massachusetts for Non-Resident Members of Pass-Th...

[ls881]

Thank you so much for your help! I received this K-1 form because the company gave a few employees, including me, who have worked for them for a long time some shares of the company as a benefit. I am a full time project manager for this company. After the company's clients hire us to do projects, and the projects are assigned to me, I am responsible for executing the projects successfully. I work just like any other project managers who work in the main office, except the location. At the beginning of 2021, the company set up an office in California. So on my W2, the employer's ID is CA xxxx. I will not pay MA taxes for this W2 portion. However, this K-1 form used the MA employer's ID, so I am wondering if I need to include/allocate all the income on the K-1 form to pay taxes in MA. Please let me know if I can provide more information to clarify. Thank you so much!