When I calculate my credit on MA Form 1 for taxes paid to CT, on Line 1 of the Form 1 Line 30 worksheet, do I enter my CT AGI or the income I earned in CT from my W-2?

[dbsjps]

 I live in MA and worked in CT until my retirement in July so my AGI includes retirement and pension income. I filed CT Form 1040-NR/PY for my CT income taxes.

[ErnieS0 · Accepted solution]

Enter the income from your W-2. Nonresident states do not tax retirement and pension income.

 Form CT-1040 starts with federal adjusted gross income but that is only used to determine your base tax rate. You are only taxed on the Connecticut portion of your total income, which should be your W-2 amount.

[dbsjps]

This approach reduces my credit by $545. Is it typical for my credit to be that much smaller than the actual taxes I paid to CT?

[JulieS]

Yes, that is a typical result. The credit is the smaller of the amount of taxes due
to other state or the portion of your Massachusetts tax due on your gross income that is taxed in the other state.

Since the tax rate is about 1.9% higher in Connecticut, in most cases your credit would be based on the Massachusetts tax on that part of your income.