I moved to Columbus, OH, in May 2022 and kept my job in Boston, MA , so I work remotely at the MA office from OH. Am I required to pay both MA and OH state taxes?

[TomD8 · Accepted solution]

For 2022, the year of your move, you will file a part-year resident return for both MA and OH.  MA can tax all your income before the move; OH can tax all the income from after the move.

After the move, the income you earn by working remotely from an OH location is taxable only by OH.  It is no longer taxable by MA.

However, should you happen to have to return to MA after the move and physically perform any work there, that income would be MA-sourced and thus taxable by MA (as well as by your new home state of OH).  If that happened, you'd be able to claim a credit on your OH return for the tax paid to MA.

[Hal_Al]

FYI. In addition to state income tax, Ohio has city income tax and School District income Tax (SDIT); both requiring the filing of income tax returns (and quarterly payments, if your employer does not withhold city and/or SDIT).

The city of Columbus does have a city income tax.  But the Columbus School District does not have an SDIT. 

The Columbus Income Tax web site: https://www.columbus.gov/incometaxdivision/.  TurboTax does not support the Columbus form. 

To verify  if you live in a school district or city with an income tax enter your address at:

http://www.tax.ohio.gov/Individual/LocalTaxInformation.aspx

[dckeithjr]

TomD8, 

Thanks for your quick reply. I was reading about "personal income tax" due to MA for nonresidents.  It wasn't really clear about out of state remote work. It seems like it applies to folks who are nonresidents but do actually travel into MA to perform work. Is this understanding correct? What are your thoughts on this?

[dckeithjr]

Hal_Al,

Thank you very much for this extra information. Very helpful!!!

[TomD8 · Accepted solution]

"It seems like it applies to folks who are nonresidents but do actually travel into MA to perform work. Is this understanding correct?" 

Yes, that's correct.  MA can tax nonresidents on income earned from work actually (physically) performed within the state of Massachusetts.

MA does not tax nonresidents on income earned remotely from a location outside the state.

[dckeithjr]

TomD8,

I can't thank you enough for confirming.

Have a nice weekend.

[dckeithjr]

Hi,

Actually, I have been informed by the State of MA that I am responsible for paying state income tax of any portion of income sourced in MA. Apparently there is a formula "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". And on top of that I am also still responsible for Ohio state income tax. How can I afford to pay income taxes to two states? I need to find out if there is an exemption or something.

Just to be clear, I spend zero days in MA a year and I work 100% remotely from Ohio.

PLEASE correct me if I am mistaken.

[TomD8]

W-2 income is "sourced" where the work is actually (physically) performed.  Work performed from a location in Ohio is Ohio-source income, regardless of the employer's location.

If your work is 100% Ohio-source, it is not subject to MA income tax.  It is 100% taxable by Ohio.

[dckeithjr]

Tom,

Thank you for your reply.

When I mentioned I was informed, I was informed by the State of MA, on the phone last week.

I completely understand your response however, please see below:

https://www.mass.gov/guides/personal-income-tax-for-nonresidents#:~:text=If%20you're%20a%20nonreside...

Am I missing something?

[TomD8]

There is no conflict between my previous answer and the Massachusetts rule you cited.  You have to pay MA income tax on any Massachusetts-source income you might have.  If you never actually (physically) work in Massachusetts, then you have no Massachusetts-source income.

If your employer ever required you to go to Massachusetts for work purposes, then the income from the work you performed there would be Massachusetts-sourced, and taxable by both MA and by your resident state of Ohio.  But in that scenario, you'd be able to claim a credit on your OH tax return for the taxes paid to MA, so you wouldn't be double-taxed.

[dckeithjr]

Tom,

It seems like I do indeed owe MA tax even though you stated two weeks ago "Yes, that's correct.  MA can tax nonresidents on income earned from work actually (physically) performed within the state of Massachusetts.

MA does not tax nonresidents on income earned remotely from a location outside the state."

Now you say there is no conflict with what you stated and what the tax code says, which sounds like you agree that I do in fact owe MA taxes.

Is it that I owe a "personal income tax" and I do not owe "income tax"?

All respect and apologies, I am more confused now than before I posted about this.

[TomD8]

To repeat:

You stated earlier that you work "100% remotely from Ohio".  If that's the case, then your income from that work is not Massachusetts-sourced and is not subject to Massachusetts income tax of any kind.  I don't know how else to say it.

[dckeithjr]

Yes that is true, however the official MA tax website indicates "

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." however you say I still don't owe MA taxes. I beg you please explain how I do not owe MA when it appears to clearly state that even as a non-resident I do owe taxes.

[TomD8]

The Massachusetts reference you're citing is the rule as to when a non-resident with Massachusetts-source income must actually file a MA tax return.  It is not the rule that defines Massachusetts-source income.   

>>A non-resident with MA-source income needs to file an MA tax return only if their MA-source income exceeds the filing threshold described in the reference.<<

A non-resident with no MA-source income has no income tax obligation to Massachusetts.

Massachusetts taxes non-residents only on Massachusetts-source income.  The following example is taken directly from Massachusetts' tax regulations, and may help you understand income "sourcing":

Example (5)(a)(1.2). A telecommuter works for a Massachusetts firm, mainly out of her home in Ohio. The telecommuter works a total of 240 days during the tax year, and is in Massachusetts on 60 of those days. Her salary is $120,000 per year. Her Massachusetts source income is $30,000, calculated as follows:

$120,000 x _____ 60_______ = $30,000

https://www.mass.gov/regulations/830-CMR-625a1-non-resident-income-tax#:~:text=A%20non%2Dresident%20...).