Taxpayer files single and is 66 years old
Schedule C gross receipts derived from three states:
Cost of goods sold
Net income from business
Social security income
Massachusetts real estate rental loss
Total self employment tax paid
Line 1. Filing Status - Single
Line 3. Total Income from U.S. 1040, Line 22
Line 4. Exemptions
|4a. Personal exemptions|
4c. Age 65 or older
Line 4f. Total exemptions
Line 13. NONRESIDENT APPORTIONMENT WORKSHEET (to Determine Trade or Business, Including Employment Carried on in Massachusetts):
13a. Sales outside of Massachusetts
13b. Sales inside Massachusetts
Since this nonresident's presence for business in Massachusetts is not casual, isolated and inconsequential, the income must be included in Massachusetts gross income.
Line 8. Business/Profession
Line 14 NONRESIDENT DEDUCTION AND EXEMPTION RATIO:
Line 15. Self Employment tax paid ($4,200 * .2666) (Deduction directly related to income reported)
Does the Taxpayer have a Filing Requirement?
The pro-rated personal exemption test ensures that taxpayers having less than $8,000 Massachusetts gross income but total income of $31,500 must still file a return.
Massachusetts source income
Even though Massachusetts gross income is less than the $8,000 threshold, it exceeds the pro-rated personal exemptions. The nonresident taxpayer is required to file a return since the income of $5,831 exceeds the pro-rated personal exemption of $814.
No Tax Status or Limited Income Credit:
Nonresidents must use adjusted gross income as if they were Massachusetts residents to determine if they qualify for either NTS or LIC. As a full year Massachusetts resident, this taxpayer's Massachusetts adjusted gross income would be $31,500 and therefore does not qualify for either No Tax Status or the Limited income Credit.