Who Must File
- General Rules
- Residents
- Nonresidents
- Part-Year Residents
- Resident/Nonresident in The Same Taxable Year
- Joint Filers
- Separate Filers
- Massachusetts References
General Rules
Massachusetts law determines the filing requirement thresholds for all residents, nonresidents and part-year residents. In many instances there is a filing requirement for an individual even though there may not be a tax liability due to the commonwealth. To determine one's filing requirement, total gross income includes income from all sources, both in and out of Massachusetts.
Full year residents who receive or accrue Massachusetts gross income in excess of $8,000 during the taxable year are required to file a Massachusetts income tax return. Even if they calculate a zero tax, however, the requirement to file still exists. Full year residents file Massachusetts Form 1 - Massachusetts Individual Income Tax Return.
Part-year residents who receive or accrue Massachusetts gross income in excess of $8,000 during the taxable year are required to file a Massachusetts income tax return. Even if they calculate a zero tax, however, the requirement to file still exists. Part-year residents file Massachusetts Form 1 NR/PY- Nonresident/Part-Year Resident Individual Income Tax Return.
Part-year resident Massachusetts gross income = income earned during the period of time a Massachusetts resident
Nonresidents whose Massachusetts gross income (Massachusetts source income) exceeds either $8,000 or their prorated personal exemption, whichever is less, are required to file a Massachusetts income tax return. Nonresidents file Massachusetts Form 1 NR/PY- Nonresident/Part-Year Resident Individual Income Tax Return.
The prorated personal exemption:
Personal exemption per filing status x Massachusetts (source) income
Massachusetts gross income as if a resident
Nonresident Massachusetts gross income = income earned from Massachusetts sources.
Joint filers are treated as single taxpayer for purposes of the filing requirements. They combine their income to determine their filing requirement.
Separate filers, each spouse determines his or her own filing requirement .
A taxpayer who is a Massachusetts resident for part of the year and a nonresident during the same year with Massachusetts source income in excess of $8,000 during the taxable year is required to file a Massachusetts income tax return. The taxpayer must file Massachusetts Form 1 NR/PY- Nonresident/Part-Year Resident Individual Income Tax Return and Massachusetts Schedule R/NR - Resident/Nonresident Worksheet. This schedule calculates the portion of income earned, as well as the deductions and exemptions allowed while a part-year resident and a nonresident.
Taxpayers who have a filing requirement may still qualify for No Tax Status or Limited Income Credit
Refunds for Taxpayers Who Are Not Required to File a Return:
Taxpayers who have no requirement to file a return but are entitled to a refund of their withholding or estimates must file tax returns to receive their refunds.
Married Filing Joint or Separate - Examples
Example 1:
| Husband wages | = $10,000 |
| Wife wages | = $3,000 |
| Combined income | $13,000 |
If married filing joint, there is a requirement to file a return since their combined income is greater than $8,000.
If married filing separate, each spouse's income is calculated separately and only the husband has a requirement to file.
Example 2:
| Husband wages | = $7,000 |
| Wife wages | = $2,000 |
| Combined income | $9,000 |
If married filing joint, there is a requirement to file a return since their combined income is greater than $8,000.
If married filing separate, each spouse's income is calculated separately and neither the husband nor the wife has a requirement to file.
Definition of Massachusetts Gross income is Massachusetts source income.
Definition of Total income from all sources is Massachusetts gross income plus non-Massachusetts source gross income; or income that would be included if a taxpayer were a full year Massachusetts resident.
Prorated personal exemption amount is the total amount allowed to a resident multiplied by the Deduction and Exemption Ratio, Line 14g, the numerator of which is Massachusetts gross income and the denominator of which is total income as if the taxpayer were a full year resident.
Example 1 - The Pro-Rated Personal Exemption Test illustrates that a nonresident having less than $8,000 Massachusetts gross income is still required to file if such income exceeds the personal exemption to which the nonresident is entitled.
Single taxpayer:
| Massachusetts gross income | = $7,500 |
| Total income from all sources | = $15,000 |
Line 14g, Ratio of Massachusetts gross income to total income | = $7,500/$15,000 = 50% (.50) |
| Prorated personal exemption allowed | = $4,400 X .50 = $2,200 |
Taxpayer is required to file since Massachusetts gross income exceeds the prorated personal exemption of $2,200.
Example 2 - Total Income Less Than Prorated Personal Exemption Test illustrates that if total income is less than total personal exemptions, the nonresident does not have a filing requirement.
Married filing joint:
| Massachusetts gross income | = $3,600 |
| Total income from all sources | = $6,600 |
| Ratio of Massachusetts gross income to total income | = $3,600/$6,600 = 55% |
| Personal Exemption | = $8,800 x .55 = $4,840 |
Since Massachusetts gross income of $3,600 does not exceed the pro-rated personal exemption of $4,840, the nonresident taxpayer does not have a requirement to file.
Example 3 - Definition of Massachusetts gross income means gross income/profit (gross receipts less costs of goods sold), not net profit or loss.
Single taxpayer whose only Massachusetts source income is rental property:
| Massachusetts rental receipts | = $16,000 |
| Massachusetts rental expenses | = ($21,000) |
| Massachusetts gross income, net rental loss | = ($5,000) considered 0 |
| Total income from all sources | = $42,000 |
| Ratio of Massachusetts source income to total income | = 0/$42,000 = 0% |
| Personal Exemption | = $ 4,400 x 0% = $0 |
Since Massachusetts gross income of $16,000 exceeds the pro-rated personal exemption of $0, the nonresident taxpayer is required to file a return.
- M.G.L. Chapter 62C, Sections 6(a)
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