2020 Tax Return: Massachusetts Non-Resident Apportionment

[rdefeo1]

I am a NH resident who's place of business is located in MA.  Due to the Covid-19 crisis I have been working from home since March.  Can I apportion the days I work in NH vs MA and only pay MA taxes on the days I physically worked in MA.  I know MA was trying  to pass a rule against it this year and NH has sued to stop them.  In the meantime how do I fill out my MA tax return?  TurboTax still has the Apportionment section.  Anyone know for sure?

[KathrynG3]

The income should be apportioned as if you were still commuting to Massachusetts.

From Massachusetts Form 1 Instructions, page 3:

2020 Revised Guidance on the Massachusetts Tax Implications of an Employee Working Remotely due to the COVID-19 Pandemic

In response to the COVID-19 pandemic, several states, including Massachusetts, have declared a state of emergency, and many businesses have implemented work-from-home requirements for their employees in response to government orders and public health recommendations.

Due to Massachusetts’ COVID-19 state of emergency for tax year 2020, all compensation paid to non-residents, who would generally perform such services in Massachusetts but for a Pandemic-Related Circumstance, will continue to be treated as Massachusetts source income subject to Massachusetts personal income tax.

Additionally, in consideration of the fact that other states have adopted similar sourcing rules, for tax year 2020 Massachusetts residents, who, immediately prior to the Massachusetts COVID19 state of emergency were employees engaged in performing services from a location outside of Massachusetts, and who began performing such services in Massachusetts due to their employing state’s COVID-19 state of emergency or other Pandemic-Related Circumstance, will be eligible to claim a credit for taxes paid to that other state, to the extent generally provided under Massachusetts law. For more information about this change go to mass.gov/dor.

[rdefeo1]

Thanks for the response!

[Paulsheahen]

New Employee v Old Employee

Hi.  I read the Massachusetts COVID remote worker rules.  As it relates to pulling in non-residents into MA nonresident taxation, it states it covers MA employees who as of a result of the emergency declaration began working remotely from outside of MA CONTINUING to have MA source income. Plus it prescribes alternate allocation methods for all of 2020 based on actual allocation percentages for 2019 or short period Jan-Feb 2020. 

What about a brand new employee who starts after the early March 2020 emergency declaration who isn’t physically present in MA for numerous months prior to changing domicile to MA late in 2020? I did not see any reference to a remote telecommuter rule in MA prior to COVID. Tax Foundation refers to it as a new, temporary rule. If it operates to continue a prior incident of taxation, shouldn’t a new remote employee be outside the rule and he/she simply allocate days in/out of MA prior to change n residency?