TITLE: 830 CMR 62.5A.1: Non-Resident Income Tax

REGULATORY HISTORY: Regulation promulgated 6/15/56, amended 7/3/57, new Regulation promulgated 7/24/86, amended 10/16/87, amended 12/27/96, amended 12/21/01, repealed and replaced 7/14/2006, amended 8/8/08.

SUMMARY OF REGULATION: This Regulation sets forth detailed rules for the taxation of Massachusetts source income received by non-residents, other than professional athletic team members. The Regulation explains the availability of composite filing to individual members who may have Massachusetts-source income other than that received from a pass-through entity. It also explains alternate allocation and apportionment methods when the normal allocation and apportionment rules do not adequately reflect a non-resident's activities in the state. In particular, this Regulation:

  • defines terms such as, "Domicile," "Massachusetts Gross Income," "Massachusetts Source Income," "Member of a Professional Athletic Team," "Non-Resident," "Presence for Business in Massachusetts," "Resident or Inhabitant" and others,
  • discusses categories of Massachusetts source income with examples,
  • explains the tax implications for a non-resident carrying on a trade or or business, including employment, in Massachusetts with examples,
  • discusses categories of income earned by a non-resident that are not subject to Massachusetts tax,
  • explains the circumstances under which a non-resident must apportion income and the rules for such apportionment with examples,
  • explains the exemptions from income that are available to non-residents and the effect of apportionment upon such exemptions with examples,
  • explains the deductions from income that are available to non-residents and the effect of apportionment upon such deductions with examples
  • explains the general tax rules for non-resident members of pass-through entities, and defines their separate apportionment rules, and provides rules for non-resident decedents and non-resident trusts,
  • discusses the various Massachusetts information and tax returns that must be filed by non-residents and those engaged in a Massachusetts trade or business that involves non-residents and discusses the rules for the filing of such returns by individuals, partnerships and other pass-through entities, decedent estates, trusts, payors and non-resident partners.
  • removes the requirement in the previous regulation that in order to participate in a composite return neither the person nor the person's spouse must have no Massachusetts-source income other that that reported on one or more composite returns
  • explains the application of the statute of limitations to composite returns
  • provides for a taxpayer with income other than that reported on a composite return to file a separate tax return
  • explains the information that must be included on the filing statement required from all persons participating in the filing of a composite return
  • requires that composite returns be filed electronically and payments be made through ACH Debit
  • explains the treatment of tiered pass-through entities

Massachusetts Department of Revenue
Rulings and Regulations Bureau
100 Cambridge Street, 7 th floor
Boston, MA 02114
(617) 626-3250
FAX: (617) 626-3290

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