My husband and I live in MA. For the past 5 years he has worked in CT. Up until last year his company took state wages out for CT only. However, last year they reported his total wages in CT and about 1/3 of those same wages in MA. They withheld about $100 for MA state taxes. This year (2016) they reported total gross wages in both CT and MA. They withheld nearly $3k in CT and about $200 in MA. How do I file for MA? Thx.
First, you'll enter all of the W-2 info under the federal taxes information, including the state boxes. The withholding for both states will be taken care of on the state returns, which is correct. MA will tax all of your income but give you credit for CT taxes paid.
When you work in a state, you're required to pay tax/report those earnings to that state. For the time your husband worked in CT, he'll pay tax on those earnings on a non-resident CT form. If he worked some days in MA, he can technically exclude those days from CT wages, which sounds like what may have happened last year (although usually you would be reporting this to the employer unless there were MA offices). When you update the state tax form for CT it will pull the information from the W-2 and ask you about changes.
Since MA is your resident state, they have claim to all of your income earned anywhere (including CT wages). However, they'll give you credit for taxes paid to another state (either through a deduction or tax credit). The software will handle this for you automatically, but you must update your resident state return last (so update CT and then MA), for the taxes to calculate correctly. If you didn't use this order, you'll need to delete the state and re-update it. To do so:
- When you login, click Take me to my return
- Next, select the State Taxes tab and then Continue.
- On the state tax summary page, you'll see your state tax return(s) listed. Click delete (next to Edit) to remove the state and add it back by clicking + Add another state.