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After you select Resident of a foreign country that has a tax treaty with the U.S., TurboTax Tax will ask if you are a Qualifying Student. If you select YES, you’ll see a box to enter your Exempt Student Wage or Salary Income.
Massachusetts source income received by a non-resident from another country that is exempt from federal taxation because of a tax treaty to which the United States is a party will also be exempt from Massachusetts taxation.
See Directive 87-4: Non-Residents from Other Countries; Effect of Tax Treaty.
What do I do if I was not a student? I was not a student when I was working abroad, and have not seen an option to exclude my foreign income from my MA state taxes.
Please clarify with some additional information and someone may be able to assist with your specific situation. First, are you filing as a MA resident or nonresident? Next, what is the other country involved?
I am filing as a MA resident and am looking to exclude foreign income (wages) from the United Kingdom from my MA state taxes. I am not a student. I was able to get my foreign income excluded federally, and now need them to be excluded from the state.
MA does not exclude foreign pay from MA resident taxes but does offer a credit for taxes paid to Canada only.
MA nonresidents who received foreign pay from a country with a Tax Treaty with the US may exclude foreign income based on the treaty.
Here is the MA reference. See the MA Tax Treatment paragraph in the "Residents Working Overseas" section. Compare that to the "Tax Treaty" section for nonresidents.
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