Must I include rental revenue from NY (non-resident) on my MA (resident) return? Why might the amount look different for MA?

[drosensweig]

I have rental revenue from NY (where I'm not a resident), which is completely cancelled out by expenses on my NY and federal returns. On my MA return, it's asking if I want to exclude this income. First of all, can I legally exclude my NY rental revenue from my MA return? Second, it looks like the expenses are not zeroing out the income on my MA return. Why would these be different from on federal and NY? Are there certain types of expenses that are deductible federally but not allowed in MA? If this came to the same amount ($0), there would be no reason even to wonder if I could legally exclude it from this state. Fundamentally, there was revenue but no profit from this property in 2024. Thank you!

[DavidD66]

As a Massachusetts (MA) resident, 100% of income is taxable by MA regardless of where it is earned or sourced.  So no, if you have New York rental income you can't exclude it on your MA tax return.  The amount of New York rental income you have to report on you MA tax return is the amount of rental income reported on Schedule E of your federal tax return.  There may be MA and/or New York adjustments for differences in how certain things are handled, like depreciation.  Your MA return will have all of your income and deductions.  You New York return will only have New York sourced income.  If the New York rental property is your only rental property and there is no taxable rental income on your New York tax return or you federal tax return, then there shouldn't be any taxable rental income on your MA tax return.

Finally, even though both New York and MA will both tax any income from New York, MA will issue you a credit for tax paid to other states if you have to pay New York tax.  

[drosensweig]

Thanks so much! 

So, I can't just hit exclude, but I'll have to check what's on schedule E where you suggest. The net income (revenue minus expenses) from this rental property is showing as $0 in my federal TurboTax (though I haven't yet checked what that puts into the forms), and it generates $0 of taxable NY income, so I'm bewildered why it's listed as about $15K on my Massachusetts return generated from the same data, and excluding or not makes about $700 difference in my total MA tax due. Though MA will credit me for any tax paid in NY on this NY income, there isn't actually any tax due in NY.

It seems to me, based on everything you're saying, that even though this can't be excluded as a whole, it should show up as $0 net in MA just as it does in federal and NY, so I'll have to find out why it does not look that way on my returns now.

[MarilynG1]

If your Federal Schedule E shows $0 as Rental Income, then your New York and Massachusetts returns should also show $0, as you mentioned.

You could try deleting MA, and stepping through the interview screens again to see if it repopulates correctly.  If you're using TurboTax Online, clear your Cache and Cookies first.

@drosensweig