Live in NH, remote work 4 days a week

[wndrbred22]

So I live in NH and work remotely 4 days a week. I work 1 day a week in MA.  It comes to about 300 hours a year that I physically work in MA. Not really sure how to do this with TurboTax Online. Has anyone done this before?  This will be the first year that I do this since the COVID/remote work restrictions have lapsed. For the last few years even though I have worked remote, I have just claimed that all of my working wages have been in MA.

[AmyC]

You do need to file the MA return and you will allocate income within the program. Follow these steps:

1. Go through MA and you will see How MA handles income for Nonresidents
2. Continue
3. Apportion your wages?
4. Yes
5. You will see your employer and wages, select Edit
6. Select the method you want to use - click Learn more in the program if you need help, it sounds like you are working days.
7. Continue
8. Enter your information  - in your case 300 hours is 37.5 days and we know 1 out of 5 working days is 20% of your income so your days outside would be 4 times that amount. Unless you are in sales or some other line of work that is not straight pay.

Page 3 of the instructions says MA sourced income is the taxable amount.

[wndrbred22]

Thanks AmyC! So just to make it clear, even though the company is in MA, and the MA company is paying me, I don't have to claim all my wages from said company because I work remotely 80% of the time? Just don't want to screw this up 🙂

[AmyC]

I added MA source income just in case, good thing!  The company is in MA so all of your income is MA source income. So, prepare the nonresident MA return, the program will calculate the tax liability and then prepare your state return to get a credit for the MA tax.

You get credit for the lower state tax on the lowest taxable amount.

• Each state calculates taxable income differently. 
• Each state has its own tax rate/ system.
• You get the lowest of both categories as a tax credit.

[wndrbred22]

Oh ok. I have never filed a NH state return because I don't earn any money in NH. In the 5 years I have lived here. Is that bad? So if I file a NH one as well I will get a credit for my MA taxes? And should I have been doing this all along?

[DawnC]

No, nothing bad about that!    Wages are not taxed in New Hampshire, so you probably don't need to file the NH resident return unless you have interest or dividend income over the exemption amount.    

You will just pay tax to MA on the wage income you earned while physically present and working in MA.    Prepare the NH resident return and file it only if you are required to.   But there won't be a credit from MA on there because NH is not going to tax those same wages.   

If you have not been required to file the interest and dividends NH return in the past, you likely will not be required to file it this year, either.   Sounds like you have been filing correctly - MA nonresident return, claiming only the wages earned in MA...

[wndrbred22]

Ok thanks so much! 🙂