620.1. In General.
620.2. Reporting State Changes in Income Tax Resulting from Another Jurisdiction's Final Determination.
620.3. Additional Assessment by DOR.
620.4. Refunds and Abatements.
620.6. Penalty for Failure to Report and Pay.
620.1. In General
If another United States state or Canada or a Canadian province makes a final determination that establishes that a personal income taxpayer's tax owed to that jurisdiction is less than the tax previously paid, when such tax was the basis for a credit claimed under G.L. c. 62, § 6(a), the taxpayer must inform DOR of that change. A determination is final if there is no right of administrative or judicial appeal. See 830 CMR 62C.30A.1(2) for more information on final determinations. If the other jurisdiction makes a final determination that the taxpayer's tax owed to that jurisdiction is more than the tax previously paid, and the final determination affects the taxpayer's ability to claim a credit under G.L. c. 62, § 6(a), the taxpayer may apply for an abatement.
620.2. Reporting Changes in Income Tax Resulting from Another Jurisdiction's Final Determination
If another jurisdiction decreases the tax due from any individual when that jurisdiction's tax was the basis for a credit claimed in Massachusetts, the taxpayer must report the change and pay any additional tax due with interest within one year from the date of the final state determination. Changes in tax due to Massachusetts as a result of another state's change are reported to Massachusetts on Form CA-6, Application for Abatement - Amended Return. A copy of the other jurisdiction's agreement, document or other report and any other relevant documentation must be attached.
620.3. Additional Assessment by DOR
If DOR determines from a taxpayer's report of change in tax due to another jurisdiction that the correct Massachusetts tax was not fully assessed, it will assess the additional tax with interest. DOR may assess the additional tax within one year of receipt of the taxpayer's report, regardless of the assessment limitations of G.L. c. 62C, § 26. If the taxpayer does not report the change to DOR, DOR will have two years from receipt of information from the other jurisdiction in which to assess the additional tax, regardless of the assessment limitations of G.L. c. 62C, § 26. The taxpayer will also be subject to a penalty as described below in 620.6. An assessment with respect to a state change is limited to changes in a taxpayer's tax liability resulting from the change in tax due to another jurisdiction.
620.4. Refunds and Abatements
If a taxpayer believes that an increase in tax due to another jurisdiction increases the credit the taxpayer could claim under G.L. c. 62, § 6(a), the taxpayer may apply for an abatement. The taxpayer may request a refund, using Form CA-6, within one year of the final determination from the other jurisdiction. Abatements sought under G.L. c. 62C, § 30A, the state change statute, are limited to amounts due to the change in the other jurisdiction's final determination.
Alternatively, the taxpayer may seek an abatement under G.L. c. 62C, § 37, the general abatement statute, within the limits established under that statute. Under the general abatement remedy of G.L. c. 62C, § 37 and 830 CMR 62C.37.1, if DOR has assessed an additional tax as a result of a taxpayer's report of changed tax due to another jurisdiction, the taxpayer may dispute the assessment by filing an application for abatement within two years of the date of assessment, or within one year of the date of payment.
See AP 627, Applications for Abatement, for more information on abatements. See TIR 99-18 regarding waiver of G.L. c. 62C, § 33(c) late‑pay penalties and suspension of involuntary collection activities under G.L. c. 62C, § 32(e) when the taxpayer disputes the assessment (or any portion thereof) administratively within DOR or with the Appellate Tax Board or Probate Court. See AP 627, sections 1 and 8, for a discussion of the time limit for filing a completed abatement application and the supporting documents needed to substantiate an abatement.
A taxpayer that owes additional tax to Massachusetts as a result of a change in tax owed to another jurisdiction may request that the additional tax be offset, or reduced, based on issues for the same tax year that are unrelated to the state change. The taxpayer should attach an application justifying the offset to the report of state change. The Commissioner will determine the taxpayer's balance due, taking the taxpayer's offset request into consideration.
If a taxpayer has requested an abatement as a result of a state change, the Commissioner may offset the amount of abatement requested with any additional tax due, whether or not the additional tax is based on issues related to the change.
Offsets may reduce the assessment or abatement, as the case may be, to zero, but not below zero.
Effective July 1, 2010, failure to report a decrease in tax owed to another jurisdiction that affects the credit claimed under G.L. c. 62, § 6(a) and failure to pay any additional tax within the time limits described above will result in a penalty of 10% of the additional tax found due. See TIR 10-11.
For general information on state changes, call the Massachusetts DOR Customer Service Bureau, (617) 887-MDOR or toll-free within Massachusetts at 1 (800) 392-6089. For specific information on changes in taxes due to another jurisdiction that may affect the credit that was or may be claimed under G.L. c. 62, § 6(a), contact the Bureau of Desk Audit, P.O. Box 7020, Boston, MA 02204, (617) 887-6900.
G.L. c. 62, § 6(a)
G.L. c. 62C, §§ 26, 30A, 32(e), 33(c), 37
830 CMR 62C.30A.1(2)
830 CMR 62C.37.1
AP 627, Applications for Abatement
Form CA-6, Application for Abatement - Amended Return