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jennnguyen
Level 1

Work in MA, residing in NYC - will I be double taxed?

I'll be telecommuting, but my employer is based in MA.

5 Replies
rjs
Level 15
Level 15

Work in MA, residing in NYC - will I be double taxed?

Assuming that you are physically working in Massachusetts, not telecommuting, you have to file two state tax returns, a Massachusetts nonresident tax return and a New York resident tax return. You have to pay Massachusetts tax on the income you earn in Massachusetts. Since you live in New York, all your income is subject New York tax, no matter where the income is from. But you will get a credit on your New York tax return for part or all of the tax that you pay to Massachusetts. Prepare your Massachusetts nonresident tax return first, then your New York resident tax return, to make sure that the credit is calculated correctly.

 

jennnguyen
Level 1

Work in MA, residing in NYC - will I be double taxed?

Hi, thanks so much for your response! I should've clarified - I will be telecommuting, but my company is based in MA. Based on this line ("since you live in New York, all your income is subject New York tax, no matter where the income is from") it sounds like it doesn't matter that I'll be telecommuting and that I'll have to file twice? I appreciate the help!

rjs
Level 15
Level 15

Work in MA, residing in NYC - will I be double taxed?

Under normal circumstances, your income is taxed where you actually work, regardless of where the company is located. So if you were telecommuting from NY to MA, you would be treated as a NY-based employee. All your income would be NY income. Your employer would have to withhold NY tax, and not MA tax. Your W-2 would not show any MA income. You would file only a NY tax return, not MA.


What makes the current circumstances not normal is that MA adopted some temporary regulations regarding telecommuting during the Covid-19 pandemic. I'm not familiar with the details. Someone else might post some information about it, but I suggest that you consult a local tax professional, preferably in MA, who can tell you whether and how the temporary regulations affect you.


Also note that we have been talking about working exclusively in NY. If you occasionally work in the company's office in MA, even for a short time, the money you earn for working in MA is MA income, and is subject to MA tax. Then you are back to filing two state tax returns, as I described above.

 

Opus 17
Level 15

Work in MA, residing in NYC - will I be double taxed?

In general, you pay state income taxes where you live, regardless of where you work or where your employer is based.  

 

7 states have special rules for telecommuters, but MA is not one of them.

 

If you were previously a resident of MA, and moved temporarily to NY (such as for COVID) then MA will continue to tax you as a resident.  NY will also tax you as a resident if you live there more than 183 days, even if your move is intended to be temporary. This is a situation where you should seek professional expert assistance.

 

However, if you have never been an MA resident, the fact that you take a new job with an MA-based employer does not change the fact that your permanent residence is in NY and that's where you pay state income tax.

 

Finally, if you do work occasionally in MA, you should expect to file an MA non-resident tax return to pay state tax on income earned within MA.  You will get a credit on your NY return for taxes paid out of state.  For example, if you are required to attend meetings 1 day every 2 weeks at the company office in MA, MA will consider that 1/10th (1 out of 10 business days) of your income is earned "in-state."

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
TomD8
Level 15

Work in MA, residing in NYC - will I be double taxed?

To add to @rjs's answer in which he referred to MA's special Covid rules for telecommuters, at this point those rules apply only to the 2020 tax year.  MA has not yet issued any special guidance for the 2021 tax year.

 

The 2020 rule was that, if a non-resident taxpayer was physically working in MA prior to the pandemic, and then began telecommuting from out-of-state due to the pandemic, their income would continue to be regarded as sourced in MA, and thus taxable by MA.

https://www.mass.gov/directive/directive-21-1-personal-income-tax-guidance-for-employees-who-telecom...

 

The normal rule is that an MA non-resident would only be taxed by MA on income from work actually (physically) performed inside MA.  Thus, under normal circumstances, the income of a NYC resident who worked 100% remotely from a NY location would not be subject to MA taxation.  (It would, of course, be fully taxable by NY.) 

 

Presumably the normal rule will hold for tax year 2021 unless new special guidance is issued.

 

 

 

 

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

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