State Income Tax

[Mairead Brennan]

Hi, I'm going to be a Rhode Island resident in a few months after the new year but I plan on keeping my job in Massachusetts. Can anyone give me specific info about what taxes will be like when filling season comes around? Any information is appreciated or even if someone can point me in the direction of what website to visit or laws to look up. Thank you in advanced!

[Hal_Al]

Your employer will continue to withhold MA state income tax.  If you ask him, he may also withhold for RI; but I'm of the opinion that is not necessary.

You will file a non-resident MA state return  and pay MA tax on your MA salary.  You will file a resident RI return and pay tax on all your income, including the MA salary. But, RI will give you a credit, or partial credit on the tax you paid to MA, so there is little or no double taxation.

That's the way works in almost all states. 

[TomD8]

If you move in 2020, for tax year 2020 you will file as a part-year resident in each of the two states.  Your income will be not be taxable by RI until you become a resident of RI, which happens on the day you begin living in your new home in RI.

During your time as an MA resident, all your income is taxable by MA.  Once you become a resident of RI,  all your income is taxable by RI.   After that,  MA can still tax you, but only on your earnings from work you actually (physically) perform in MA.   And as @Hal_Al explained, you'll be able to take a credit on your RI return for the taxes you pay to MA on income that is also taxed by RI.  

I agree with @Hal_Al that your MA employer should continue withholding MA taxes after your move to RI.  That's because (due to the credit) even after the move you'll still be paying most if not all of your state taxes to MA, assuming you keep working there.

All this will apply only to your 2020 returns, which you won't be preparing until 2021.

[Mairead Brennan]

Thank you!

[Mairead Brennan]

Thank you!!