salary allocation for state income

[ndp22]

my wife and I moved from MA to CT in November '24.  We both kept the same jobs at the same company that are both located in MA.  I went through the MA and CT state returns and allocated each of our salaries per the time spent in each state.  Everything seems straight forward and okay to me except it's calculating that I owe $1,500 for MA state taxes (underpaid income tax throughout the year it says).  My question really is that nothing has changed with my wife or my role/job/salary and I have gotten a refund for 12 straight years.  I just want to ensure I'm not missing something and that this move to CT really caused this!

[TomD8]

Be sure you follow the TT instructions for preparing two part-year resident state returns.

How do I file a part-year state return?

Since you both worked all year in MA, you should allocate all your work income to MA.  You should allocate to CT only the portion of your incomes earned after you became residents of CT.

CT will give you a credit for the taxes paid to MA on the portion of your income taxed by both states.

You will note from the instructions that TurboTax recommends that you complete the return for your "old" state before you do the return for your "new" state, so that the program can calculate the credit.

If you make your entries correctly and follow the TT instructions, then your returns should produce an accurate result.

[ndp22]

Thank you, I really appreciate your answer.  I will do what you suggest.

Just to confirm - we moved in November '24 so we spent November/December as CT residents.  We would still allocate 100% of our salary to MA because we worked for a MA based company all year?  Does it change anything if we are both "fully remote" workers.

[TomD8]

@ndp22 --

 "Does it change anything if we are both "fully remote" workers."

Yes, it does.  If you never physically worked within MA after your move to CT, then the portion of your income earned after the move is taxable only by CT.

In that case would allocate to MA only the portion of your income earned prior to becoming CT residents.  You would allocate to CT only the income earned after becoming CT residents.

For tax purposes, you became CT residents on the day you began living there as your new permanent home.

[ndp22]

Ok that makes sense.  I was getting tripped up with the verbiage of "MA sourced income".  Which essentially would mean if you are physically at a company in the state of MA it would be sourced there.  If you are considered a remote employee, your income source is the state you currently live in.

For deductions, would I also split the FICA withholdings between the two states?  The MA state return asks me to allocate the 'non-MA portion' of FICA.

[TomD8]

Just so you know, the rule for most states is that work income is "sourced" where the work is actually (physically) performed.

MA does require part-year residents to take deductions only in proportion to the number of days they were a Massachusetts resident.