Capital Gains and Losses Summary - what makes something a "non-Massachusetts item" ?

[KellyK]

I'm working on my Massachusetts state tax return and I don't understand what it's asking me to do... I am a nonresident/part-year resident so I need to do something apparently.

What makes something a "non-Massachusetts item" ? I have no idea what would make something "from outside the state."

Would that mean "I didn't live in Massachusetts when this stuff was sold"?

Each line item in this table is like... "Bunchanumbers FID 500 IDX bunchanumbers" so I don't know how I'd determine what state that's "from."

So I'm guessing it's about where *I* lived at the time it was sold? And if I lived in MA at the time for each item, I wouldn't need to mark anything as a non-Massachusetts item?

[MonikaK1 · Accepted solution]

Yes, for income from items such as stock sales, report them as non-Massachusetts items if you sold them before moving to Massachusetts. Otherwise, you don't need to show them as non-Massachusetts items.

If you worked in Massachusetts while living in another state, the wages would be Massachusetts-sourced.

If you need to prepare two state returns, prepare the previous resident state first, then the state where you were a resident at the end of 2022. You may be able to get a credit on your resident return for taxes paid to the previous state if they would otherwise be double-taxed.

See also this TurboTax article and this one on multiple-state situations.

[KellyK]

Thanks so much for your help Monika!

[coking]

Hi! I have a similar question, I moved out of Massachusetts at the end of the year. I sold stock that was acquired and sold after I moved, but the stock was granted by my Massachusetts employer. Is this still a "non-Massachusetts item"?

[MonikaK1]

Stock issued by an employer can be considered investment income connected with employment carried on in Massachusetts for a nonresident of the state, and therefore be considered Massachusetts-sourced income.

Massachusetts-sourced income includes items of gross income derived from or effectively connected with any trade or business, including any employment, carried on by the taxpayer in Massachusetts, whether or not the non-resident is actively engaged in a trade or business or employment in Massachusetts in the year.

The Massachusetts income tax is imposed on the Massachusetts source income earned or derived by non-residents. Massachusetts source income includes the following types of income, but excludes items of income set forth in 830 CMR 62.5A.1(4):

(a) Income Derived from or Effectively Connected with a Trade or Business, Including Any Employment Carried on in Massachusetts. This income is defined as the income that is earned by, credited to, accumulated for or otherwise attributable to the taxpayer's trade or business in the Commonwealth in any year or part thereof, regardless of the year in which the income is actually received by the taxpayer and regardless of the taxpayer's residence or domicile in the year it is received. All types of income, including investment income, derived from or effectively connected with the carrying on of a trade or business within Massachusetts are Massachusetts source income. The term may include gain from the sale of a business or an interest in a business, distributive share income, separation, sick or vacation pay, deferred compensation and nonqualified pension income not prevented from state taxation by the laws of the United States, and income from a covenant not to compete.

See here for more information from Massachusetts.