- General Rules and Qualifications
- Nonresidents and Part-year Residents
- Non-Massachusetts Military Service Compensation Exclusion for Calculation of NTS and LIC
- Worksheet Examples:
- Where to Report on Original Tax Return; What to Enclose
- Documentation to Submit with Abatement/Amended Tax Return
- Massachusetts and Federal References
- Prior History of NTS and LIC
General Rules and Qualifications
If a taxpayer's Massachusetts Adjusted Gross Income (Massachusetts AGI) does not exceed certain thresholds for the taxable year, he or she qualifies for No Tax Status (NTS) and is not required to pay any Massachusetts income tax. A taxpayer qualifying for NTS must still file a tax return.
Taxpayers Who Do Not Qualify for No Tax Status May Qualify for Limited Income Credit (LIC):
If taxpayers do not qualify for No Tax Status (NTS), but their Massachusetts Adjusted Gross Income does not exceed certain thresholds, they may qualify for the Limited Income Credit (LIC). This credit involves an alternative tax calculation that can result in a significant tax reduction for taxpayers whose income is close to the NTS threshold.
Calculation of Massachusetts Adjusted Gross Income:
Adjusted gross income calculation is gross income reduced by certain business expenses and other deductions claimed on Massachusetts Schedule Y, Lines 1 - 10, such as allowable employee business expenses, alimony paid or student loan interest, etc.. With the exception of Line 4, these are generally federal allowable deductions.
Married filing separate taxpayers do not qualify for either NTS or LIC.
- for residents, the AGI Worksheet for NTS; if they do not qualify for NTS but may be entitled to LIC they must fill out both the AGI Worksheet and the Line 29 Worksheet;
- for nonresidents and part-year residents, Schedule NTS-L-NR/PY, No Tax Status and Limited Income Credit. They must compute their Massachusetts adjusted gross income (AGI) as if they were Massachusetts residents for the entire taxable year. In determining whether or not they qualify for NTS, they must include all non-Massachusetts source income as well as all non-Massachusetts Schedule Y, Lines 1 - 10 deductions. They fill out Schedule NTS-L-NR/PY, Lines 1 through 11; if they do not qualify for NTS but may be entitled to LIC they must fill out lines 1 through 15
Note: all losses must be reported on the worksheets/Schedules and the Schedule as zero.
Non-Massachusetts source income means all of the income that a Massachusetts resident would be required to report.
Table for No Tax Status (NTS) and Limited Income Credit (LIC) Thresholds
Because the income level for No Tax Status for joint filers and heads of household is based in part on the personal exemption amounts, in 2008 the threshold for No Tax Status for these taxpayers has been changed to reflect changes to the personal exemptions. The Limited Income Credit calculation is similarly affected.
If Line 7 of the Massachusetts AGI Worksheet is less than the amounts below, then taxpayer qualifies for either the NTS or LIC.
No Tax Status Thresholds for 2016:
|Filing Status||Maximum NTS AGI||Additional NTS Amount per Dependent|
|Head of Household||$14,400 +||$1,000|
|Married Filing Jointly||$16,400 +||$1,000|
Limited Income Credit Thresholds for 2016:
|Filing Status||Maximum LIC AGI||Additional LIC Amount per Dependent|
|Head of Household||$25,200 +||$1,750|
|Married Filing Jointly||$28,700 +||$1,750|
Note: Married filing separate taxpayers do not qualify for No Tax Status or the Limited Income Credit.
Note: per M.G.L Chapter 62, Section 5(a), to be eligible for LIC, Massachusetts adjusted gross income cannot exceed 175% of the NTS thresholds, e.g. HH NTS AGI = $14,200 * 175% = $24,850.
- Residents must complete the Form 1, Line 27 Massachusetts AGI Worksheet - No Tax Status, 2016 Form 1 Instructions , page 13. If qualified, fill in the oval on Form 1, Line 27, and enter "0" in Line 28.
If they do not qualify for NTS but may be entitled to LIC, residents must also complete the Form 1, Line 29 Worksheet, Limited Income Credit, 2016 Form 1 Instructions , pages 13-14. If qualified, enter the amount from Line 6 of the LIC worksheet on Mass Form 1, Line 29.
- Nonresidents and part-year residents must complete the Schedule NTS-L-NR/PY , Lines 1-11. If qualified, fill in the oval on Form 1-NR/PY, Line 31, and enter "0" in Line 32.
They must compute their Massachusetts adjusted gross income (AGI) as if they were Massachusetts residents for the entire taxable year. In determining whether or not they qualify for NTS, they must include all non-Massachusetts source income.
If they do not qualify for NTS but may be entitled to LIC, they should complete the Schedule NTS-L-NR/PY , Lines 12-17. If qualified, enter the amount from Line 17 of the schedule on Mass Form 1-NR/PY, Line 33.
- for NTS, Massachusetts AGI worksheet from the Massachusetts Form 1 instruction booklet;
- for LIC, both Massachusetts AGI worksheet and Limited Income Credit Worksheet from the Massachusetts Form 1 instruction booklet;
- nonresident or part-year residents, Massachusetts Form 1 - NR/PY, Schedule NTS-L-NR/PY and copy of U.S. Form 1040, 1040A, 1040EZ, or 1040NR.
- M.G.L. Chapter 62, Sections 5(a); 2(d)
- TIR 09-23: Effect of the Military Spouses Residency Relief Act
- TIR 06-25: Changes in the Income Personal Exemption Amounts Effective January 1, 2007
- TIR 04-6: Effect of the Federal Servicemembers Civil Relief Act (P.L. 108-189) on Massachusetts Nonresidents with Military Compensation
- Federal Servicemembers Civil Relief Act (P.L. 108-189)