Non resident tax return with MA

[waltz2u]

My family moved from CT to MA. We are non residents in MA (<183 days) and residents in CT for 2020 (>183 days). Our salaries are from CT. We started some stock selling/buying when we were in CT, as well as when we moved to MA. We file resident tax return with CT. Do we have to file non resident tax return with MA? Thank you so much.

[DanielV01]

Since you moved from CT to MA, you file part-year tax returns for both states.  You pay CT tax for the full year, because all of the income is earned there.  For the portion of the year you were MA residents, you will be able to claim a credit for the tax you pay to CT on that income.

[waltz2u]

Thank you so much. I would just like to clarify - as we had lived in MA for less than 183 days, are we non residents of MA for 2020?

I was reading this

https://www.mass.gov/guides/personal-income-tax-for-nonresidents

"If you're a nonresident of Massachusetts, you must file a Massachusetts Income Tax Return if you received Massachusetts source income in excess of your personal exemption multiplied by the ratio of your Massachusetts source income to your total income, or your gross income was more than $8,000 – whether received from sources inside or outside Massachusetts."

and

https://www.mass.gov/service-details/l[product key removed]chus[product key removed]e-for-nonresiden...

"Nonresidents are only taxed on their Massachusetts gross income"

"

Excluded from Massachusetts gross income

• Income from certain intangibles (e.g. annuities, interest, dividends, and gains from selling or exchanging intangibles) unrelated to:
  • Massachusetts employment 
  • Massachusetts business
  • Selling or exchanging real or tangible Massachusetts personal property

"

If we were non residents of MA for 2020, do we have to file non resident tax return with MA? My impression was that because our salaries are from CT so the source is not MA, also the earning from stock activities is excluded as mentioned above in the article (I consider stock things are intangibles), we might not have to file it with MA. I may be wrong. Would you please help?

[DanielV01]

That law causes confusion, but that applies to someone who maintains a residence in Massachusetts, (such as a Cape Cod second residence, for example), but who is not domiciled (main home) in Massachusetts.  In this situation, an individual who is physically present in Massachusetts for 183 days or more while at the same time maintaining a residence the entire year is considered a satutory resident of Massachusetts which would require all of the income to be taxable in Massachusetts.  But in your case you moved to Massachusetts.  For someone who establishes a main residence in Massachusetts (and becomes a domiciliary resident) after the 1st of the year, the individual must file a part-year Massachusetts return.

[waltz2u]

Thank you so much.

In my case, we rent a house in CT before moving. In MA we still rent. At the time we moved to MA it was still considered temporary as our work was still in CT. Only in 2021 when I got a new job in MA, then we consider we really moved. Would our situation be different? Thank you again for helping.

[DanielV01]

I don't think Massachusetts would consider your situation different, but the end result is the same if the CT tax is greater than the MA tax.  If in preparing a MA return your MA tax is $0 because of credit for taxes paid to CT, then you could argue that you file as a CT resident for the year and not use the MA return at all.  But since you did change residency (regardless of the work situation), Massachusetts probably would argue that you began your MA residency in 2020, and not when you began working in MA.

[waltz2u]

Thank you so much!!