Nonresident and Part-Year Resident Deductions

Deductions are either:

  • deducted in full if directly related to specific items of taxable income reported on Form 1-NR/PY or to a personal residence located in Massachusetts;
  • prorated for nonresidents based on income reported - the deduction must be multiplied by the Massachusetts Form 1-NR/PY, Line 14, Nonresident Deduction and Exemption Ratio. This ratio is a fraction; the numerator of which is Massachusetts gross income (derived from sources within Massachusetts) and the denominator of which is Massachusetts gross income derived from all sources, as if the taxpayer were a full year Massachusetts resident.
  • prorated for part-year residents based on days a Massachusetts resident - the deduction must be multiplied by the Massachusetts Form 1-NR/PY, Line 2, Number of Days as a Massachusetts Resident Ratio. This ratio is a fraction; the numerator of which is the number of days taxpayer is a Massachusetts resident and the denominator of which is 365 days.

The following deductions are allowed in full if directly related to specific items of taxable income reported on Form 1-NR/PY or to a personal residence located in Massachusetts:

  • FICA, Medicare, RR, U.S. or Massachusetts Retirement Deduction;
  • Certain Schedule Y deductions:
    • employee business expenses;
    • most miscellaneous deductions from U.S. 1040, Line 36;
    • moving expenses;
    • penalty on early savings withdrawal;
    • self-employed health insurance.
For example, early withdrawal of savings deduction is only available if the penalties were related to Massachusetts interest income reportable, or previously reported, on a Massachusetts tax return.
  • Certain Schedule Y deductions because the amount was required to be included initially:
    • incapacitated firefighter and police officer income excluded under G.L. c.41, s.111F;
    • income excluded income per U.S. tax treaties.
  • Rental Deduction:
    Part-year residents and nonresidents are allowed a deduction equal to 50% of the rent paid (up to $3,000) if the residence is located in Massachusetts and it is the taxpayer's principal residence.

    Nonresidents entitled to this deduction would be individuals who have no domicile, for example migrant workers, who come to Massachusetts and pay rent while they are working here.

The following deductions may be allowable to either a nonresident or part-year resident. If allowable, the deduction must be prorated by Line 2 for part-year residents or 14g by nonresidents:

  • *child under age 13/disabled dependent/spouse care expenses;
  • number of dependent member of household under age 12, dependents age 65 or over, or disabled dependents; and
  • Schedule Y deductions:
    • *alimony paid deduction;
    • clean fuel vehicles deduction;
    • college tuition deduction;
    • health savings accounts deduction;
    • medical savings account deduction;
    • student loan interest deduction; and
    • undergraduate student loan interest deduction.

* part-year residents may claim these deductions in full only for amounts paid during the time in which they were Massachusetts residents.


Nonresident and Part-Year Resident Exemptions

Exemptions are:

prorated for part-year residents based on days a Massachusetts resident - the exemptions must be multiplied by the Massachusetts Form 1-NR/PY, Line 22a by Line 2, Total Days as Massachusetts Resident Ratio. This ratio is a fraction; the numerator of which is the number of days taxpayer is a Massachusetts resident and the denominator of which is 365 days.

Any person with a short taxable year (not relative to death) is only allowed the exemptions related to the number of days as a resident of Massachusetts divided by 365.


Form 1-NR/PY, Line 2 Part-year Residents Only

Part-year residents are required to prorate certain deductions and exemptions by a ratio. This ratio is a fraction; the numerator of which is the number of days taxpayer is a Massachusetts resident and the denominator of which is 365 days.


Form 1-NR PY, Line 14g, Nonresident Deduction and Exemption Ratio

Nonresidents are required to prorate certain deductions and exemptions by a ratio. This ratio is a fraction; the numerator of which is Massachusetts gross income (derived from sources within Massachusetts) and the denominator of which is Massachusetts gross income derived from all sources, as if the taxpayer were a full year Massachusetts resident. 

Line 14a, total 5.25% income from line 12 of Massachusetts Form 1-NR/PY

14b, interest income included on line 7a or 7b of Massachusetts Form 1-NR/PY, whichever is smaller.

14c, Total Schedule B and Schedule D income included on Schedule B, Part 1, Line 7 and Part 2, Line 13, and Schedule D, Line 13.

14d, Total income this return, which is nonresident Massachusetts gross income (derived from sources within Massachusetts), 14a thru 14c.

14e, Non-Massachusetts source income, which is any additional  income that would be included if a taxpayer were a full year Massachusetts resident. 

Income that does get added back in line 14e:

Income that does not get added back in line 14e:

*Military Service Compensation.

* Massachusetts Adopts the Non-Massachusetts Military Service Compensation Exclusion for Tax Years Beginning on or after January 1, 2003:
The Federal Service members Civil Relief Act (P.L. 108-189, effective December 19, 2003) provides that a tax jurisdiction may not use military service compensation of a nonresident service member to increase the tax liability imposed on other income earned by the nonresident service member or spouse subject to tax by the jurisdiction.

Nonresident taxpayers, who have a filing requirement in Massachusetts because they have MA source income other than military source income:

    • should not include any military service compensation as non-Massachusetts source income when determining whether they qualify for NTS or LIC;
    • should include military service compensation as non-Massachusetts source income when determining the deduction and exemption ratio. Specifically, nonresident taxpayers filing Form 1-NR/PY must include any military service compensation received during the taxable year Line 14e of Form 1-NR/PY.
Military service compensation means both compensation earned by members of the armed forces for service in a combat zone (which is always excluded from gross income to the extent excluded federally) as well as any other military service compensation.


14f, Total income
, add 14d and 14e, which is Massachusetts gross income from all sources, e.g. Nonresident Massachusetts gross income plus  income that would be included if taxpayer were a full year Massachusetts resident.

14g, Deduction and exemption ratio, which is Massachusetts income divided by total income.

Note: Line amounts cannot be negative numbers. Losses are entered as zero.


Massachusetts References: