MA STATE TAX LAW

[bspittell]

My employer in MA recently changed my state tax deduction to withdraw RI state tax, where I live and have been working remotely from. I was sent the following info from "GeorgeM777" from this forum: 

In September 2021, MA ended the temporary regulations the state had put in place regarding teleworkers.  Now, the rules in effect in MA are as follows: Nonresidents. All compensation received for services performed by a nonresident who, immediately prior to the Massachusetts COVID-19 state of emergency was an employee engaged in performing such services in Massachusetts, and who is performing services from a location outside Massachusetts due to a pandemic-related circumstance, will continue to be treated as Massachusetts source income subject to personal income tax under M.G.L. c. 62, § 5A and personal income tax withholding pursuant to M.G.L. c. 62B, § 2. (See 830 CMR 62.5A.3(3)(a).) A nonresident employee who, prior to the Massachusetts COVID-19 state of emergency, determined Massachusetts source income by apportioning based on days spent working in Massachusetts in accordance with 830 CMR 62.5A.1(5)(a), must continue to do so based on: (1) the percentage of the employee's working days spent in Massachusetts during the period January 1 through February 29, 2020 as determined under 830 CMR 62.5A.l(5)(a); or (2) if the employee worked for the same employer in 2019, the apportionment percentage properly used to determine the portion of employee wages constituting Massachusetts-source income on the employee's 2019 return. (See 830 CMR 62.5A.3(3)(b).) So, in response to your first question, the answer will depend at least in part as to why you began working from home.  Was it COVID-19 related?  If so, it would appear that your wages are subject to tax by MA.  If not, then the paragraph above that relates to allocating time spent appears to apply. 

I BEGAN WORKING AT THIS JOB IN MARCH 2020, AND HAVE NEVER VISITED THE OFFICE EXCEPT TO GAIN A SECURITY BADGE. Should they be taking out MA state tax, or RI state tax??

[RobertB4444]

As @GeorgeM777 stated if you started working from home due to COVID then Massachusetts gets a cut.  You should first do a Massachusetts non-resident return and then do your Rhode Island resident return so that Rhode Island will give you a credit for any taxes paid to Massachusetts.

[bspittell]

Thanks. I will be sure to file both, a non-resident for MA and a resident RI form. But, can you tell me if my employer in MA should be withdrawing MA state taxes, or RI state taxes from my paycheck??

[AmyC]

Unfortunately, the laws are constantly changing and can be made retroactive. If your employer is willing to say you are 100% RI and that you qualify for that, you can. Mass is following along with many other states in now saying that state based income is taxable in that state. The laws by state are changing rapidly so there is no crystal ball on what the actual law will be next year at this time.  You may want to pick the state with the highest tax to avoid owing or have all income as RI and you might get lucky!