Worked Remotely while physically in MA, help with calculation to determine prorated personal exemption if filing is needed as a Non-Resident using paper form

Forum|Forum|3 years ago
April 1, 2023
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Hi,

I worked remotely physically in the state of MA for about 3 weeks in 2022 and am a resident of NC, with single status no children or dependents. My tax witheld in NC where I lived in 2022. The company is a global company with offices in major metropolitan cities.

I am very confused after reading the forms several times and have having difficulty understanding how to calculate the prorated personal exemption Massachusetts Non-Resident Tax form. I already filed my taxes for federal and NC state. However, I wanted to understand how this works by doing it by hand so I don't have to pay for the Turbotax state download just to figure out if I have to file.

Let's say I made $70000 income on my W2 in 2022 and worked in MA for 15 days. I can say that I worked in NC for 225 days for a total of 240 working days in 2022. My W2 witheld taxes from NC for all 2022 and not MA.

1. How do I calculate the prorated personal exemption amount? Can you please show the calculations. You can make assumptions if you don't have all the info and let us know what assumptions you are making.

2. If I made less than $8000 in MA source income based on the days working remotely in MA does that mean I have to file or do I have to do the proprated personal exemption calculation?

3. Do the deductions for the MA prorated personal exemption calculation include Medicare and Social Security taxes witheld from the W2?

Nonresidents

If you're a nonresident with an annual Massachusetts gross income of more than either $8,000 or the prorated personal exemption, whichever is less, you must file a Massachusetts tax return.

You are an individual nonresident if you are neither a full-year or part-year resident.

Nonresidents use Form 1-NR/PY: Massachusetts Nonresident/Part-Year Tax Return.

Source:

https://www.mass.gov/doc/2022-form-1-nrpy-massachusetts-nonresidentpart-year-tax-return/download

https://www.mass.gov/regulations/830-CMR-625a1-non-resident-income-tax

Thank you for your help

ErnieS0

Level 15

You do not have to file a non-resident Massachusetts income tax return if worked remotely for a Massachusetts company.

Massachusetts only taxes employees who actually worked in-state.

Massachusetts says:

Massachusetts source income includes items of gross income derived from or effectively connected with any trade or business, including any employment, carried on by the taxpayer in Massachusetts, whether or not the non-resident is actively engaged in a trade or business or employment in Massachusetts in the year in which the income is received.

830 CMR 62.5A.1: Non-Resident Income Tax

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hellotax1111Author

Level 5

Thanks @ErnieS0 !

1. Can I ask how you know my company is a MA company? It is a global company with offices in multiple states including one in Boston.

2. Would you be able to please list out the prorated personal exemption calculation example with my case as an example so I know how to do that for future?

ErnieS0

Level 15

Your work location determines your state income tax, not your company’s location. Massachusetts does not tax a nonresident unless you physically worked in MA.

The personal exemption deduction is the exemption based on your filing status times the percentage of MA income. For example, if you were single, the 2022 exemption is $4,400. If your MA income was 50%, your exemption would be $2,200.

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