December 4, 1980

You request a ruling on whether your disability and retirement payments, as described herein, are subject to Massachusetts income tax.

You were an active employee of the ********** Company ("Employer") for 28 years. In August, 1980, you began to receive disability payments under your Employer's non-contributory sick­ness and benefit plan. These payments will continue until next year when you reach retirement age. At that time, your retirement benefits will start. Your disability checks are mailed to you from your Employer's regional headquarters in New Jersey.

At the time you became disabled, you were a Massachusetts resident, employed in your Employer's plant in Watertown, Massachusetts. While you are on disability, your Employer considers you an employee of that branch. On August 30, 1980, you moved to Florida. It is assumed for the purposes of this ruling that your twenty-eight years of employment occurred in Massachusetts.

Massachusetts General Laws Chapter 62, Section 5A provides in part:

"Massachusetts gross income [of a non-resident] shall be determined solely with respect to items of gross income from sources within the Commonwealth of such person...Items of gross income from sources within the Commonwealth are items of gross income derived from or effectively connected with any trade or business, including employment carried on by the taxpayer in the Commonwealth..."

Based on the foregoing, it is ruled that both your disability and your retirement benefits, which are derived as a result of prior employment in Massachusetts, are subject to the Massachusetts income tax under General Laws Chapter 62.

A Massachusetts resident who becomes a non-resident during the taxable year must file both a resident return, Form 1, for the period during which he was a resident, and a non-resident return, Form 1-NR, for the balance of the year. Both returns are due on or before the following April 15th.

This letter is not to be construed as a determination of domicile.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH:DMH:mf

LR 80-83