Example #1 - Qualifies for NTS

A full year resident taxpayer who files single.

Income:

  • W-2 wages = $10,500

Deductions:

  • Alimony Paid = $3,000

Filing Requirement:
Taxpayers who accrue Massachusetts gross income in excess of $8,000 during the taxable year are required to file a Massachusetts income tax return. They may calculate a zero tax, however, the requirement to file still exists.
 

2014 Form 1, Line 27 Massachusetts AGI Worksheet. No Tax Status (Only If Single, Head of Household or Married Filing Jointly)
If your Massachusetts AGI was $8,000 or less if single, $14,400 or less plus $1,000 per dependent if head of household, or $16,400 or less plus $1,000 per dependent if married filing a joint return, you qualify for No Tax Status and are not required to pay any Massachusetts income taxes.
1. Enter your total 5.2% income from Form 1, line 10. Not less than "0"
(Add back any Abandoned Building Renovation deduction claimed on Schedule(s) 
C and/or E before entering an amount in line 1.) 

$10,500

2. Add Schedule Y, lines 1 through 10 
 

($3,000)

3. Subtract line 2 from line 1. Not less than "0" 
 

$7,500

4. Enter total Massachusetts bank interest or the interest exemption amount, whichever is smaller, from Form 1, line 5a or line 5b

Note: If Form 1, line 10 is a loss, combine Form 1, line 10 with the smaller amount of total Massachusetts bank interest or the interest exemption amount. Enter the result in line 4, unless the result is a loss. If the result is a loss,
enter "0."

$0

5. Enter amount from Schedule B, line 35. If there is no entry in Schedule B, line 35 or if not filing Schedule B, enter the amount from Form 1, line 20 

$0

6. Enter the amount from Schedule D, line 19. Not less than "0." (If filing Schedule D-IS, Installment Sales, see the Schedule D-IS instructions, available at www.mass.gov/dor, for the amount to enter in line 6.)  

$0

7. Add lines 3 through 6

$7,500

If you are single and the total in line 7 is $8,000 or less, you qualify for No Tax Status. Fill in the oval in line 27, enter "0" in line 28 and omit lines 29 and 30. Also enter "0" in line 31 and complete Form 1. However, if there is an amount entered in line 25, Credit Recapture Amount and/or additional tax on installments sales, enter the amount in line 28 and complete line 30. If you are single but do not qualify for No Tax Status, and your total in line 7 is $14,000 or less, complete Form 1, line 28 and see Form 1, line 29 instructions for the Limited Income Credit. If you are filing as head of household or married filing a joint return, compare line 7 with the table below to see if you may qualify for No Tax Status or the Limited Income Credit.
 
Number of dependents
(from Form 1,
line 2b):
Head of Household.
Line 7 of the AGI worksheet
is less than or equal to:
Married filing a joint return.
Line 7 of the AGI worksheet
is less than or equal to:
0

$14,400                           $25,200

$16,400                            $28,700

1

$15,400                           $26,950

$17,400                            $30,450

2

$16,400                           $28,700

$18,400                            $32,200

3

$17,400                           $30,450

$19,400                            $33,950

4

$18,400                           $32,200

$20,400                            $35,700

5

$19,400                           $33,950

$21,400                            $37,450

6

$20,400                           $35,700

$22,400                            $39,200

 


you may qualify 
for No Tax Status



 

you may qualify
for the Limited
Income Credit


 


you may qualify 
for No Tax Status



 

you may qualify
for the Limited
Income Credit

 

No Tax Status:
Income threshold for single is $8,000. Taxpayer's Massachusetts adjusted gross income of $7,500 qualifies for no tax status.


Example #2 - Qualifies for No Tax Status

Full year resident taxpayers who files married filing a joint return
3 dependents
 

Income: 
W-2 wages$19,800
MA bank interest$1,200
Gross Income$21,000
Deductions: 
FICA Expenses($2,000)
Employee Business Expenses($2,000)
Total Deductions$4,000
Gross Income Less  Deductions: 
Gross Income$21,000
Schedule Y Deductions, Lines 1 - 10($2,000)
Adjusted gross Income$19,000
Filing Requirement:
Taxpayers who accrue Massachusetts gross income in excess of $8,000 during the taxable year are required to file a Massachusetts income tax return. They may calculate a zero tax, however, the requirement to file still exists.
2014 Form 1, Line 27 Massachusetts AGI Worksheet. No Tax Status (Only If Single, Head of Household or Married Filing Jointly)
If your Massachusetts AGI was $8,000 or less if single, $14,400 or less plus $1,000 per dependent if head of household, or $16,400 or less plus $1,000 per dependent if married filing a joint return, you qualify for No Tax Status and are not required to pay any Massachusetts income taxes.
1. Enter your total 5.2% income from Form 1, line 10. Not less than "0"
Add back any Abandoned Building Renovation deduction claimed on Schedule(s) C and/or E
before entering an amount in line 1.)
 

$20,800

2. Add Schedule Y, lines 1 through 10
 

($2,000)

3. Subtract line 2 from line 1. Not less than "0"
 

$18,800

4. Enter total Massachusetts bank interest or the interest exemption amount, whichever is smaller, from Form 1, line 5a or line 5b

Note: If Form 1, line 10 is a loss, combine Form 1, line 10 with the smaller amount of total Massachusetts bank interest or the interest exemption amount. Enter the result in line 4, unless the result is a loss. If the result is a loss,
enter "0." 

$200

5. Enter amount from Schedule B, line 35. If there is no entry in Schedule B, line 35 or if not filing Schedule B, enter the amount from Form 1, line 20
 

$0

6. Enter the amount from Schedule D, line 19. Not less than "0." (If filing Schedule D-IS, Installment Sales, see the Schedule D-IS instructions, available at www.mass.gov/dor, for the amount to enter in line 6.) 
 

$0

7. Add lines 3 through 6

$19,000

If you are single and the total in line 7 is $8,000 or less, you qualify for No Tax Status. Fill in the oval in line 27, enter "0" in line 28 and omit lines 29 and 30. Also enter "0" in line 31 and complete Form 1. However, if there is an amount entered in line 25, Credit Recapture Amount and/or additional tax on installments sales, enter the amount in line 28 and complete line 30. If you are single but do not qualify for No Tax Status, and your total in line 7 is $14,000 or less, complete Form 1, line 28 and see Form 1, line 29 instructions for the Limited Income Credit. If you are filing as head of household or married filing a joint return, compare line 7 with the table below to see if you may qualify for No Tax Status or the Limited Income Credit.
 
Number of dependents
(from Form 1,
line 2b):
Head of Household.
Line 7 of the AGI worksheet
is less than or equal to:
Married filing a joint return.
Line 7 of the AGI worksheet
is less than or equal to:
0

$14,400                           $25,200

$16,400                            $28,700

1

$15,400                           $26,950

$17,400                            $30,450

2

$16,400                           $28,700

$18,400                            $32,200

3

$17,400                           $30,450

$19,400                            $33,950

4

$18,400                           $32,200

$20,400                            $35,700

5

$19,400                           $33,950

$21,400                            $37,450

6

$20,400                           $35,700

$22,400                            $39,200

 


you may qualify 
for No Tax Status



 

you may qualify
for the Limited
Income Credit


 


you may qualify 
for No Tax Status



 

you may qualify
for the Limited
Income Credit


 

No Tax Status:
Income threshold for married filing joint return with 3 dependents is $19,400. Taxpayer's Massachusetts adjusted gross income of $19,000 qualifies for no tax status.


Example #3 - Qualifies for Limited Income Credit

A full year resident taxpayer who files single
 

Income: 
Wages$9,500
Short-term capital gains (Sch. B, Line 35)$ 4,000
Gross Income$13,500

Deductions:

(0)
Exemptions: 
Personal exemptions($4,400)
Medical exemptions($ 1,000)
Total exemptions($5,400)
Gross income less deductions: 
Income$13,500
Schedule Y, Lines 1 - 10($0)
Adjusted gross income$13,500
Filing Requirement:
Taxpayers who accrue Massachusetts gross income in excess of $8,000 during the taxable year are required to file a Massachusetts income tax return. They may calculate a zero tax, however, the requirement to file still exists.
2014 Form 1, Line 27 Massachusetts AGI Worksheet. No Tax Status (Only If Single, Head of Household or Married Filing Jointly)
If your Massachusetts AGI was $8,000 or less if single, $14,400 or less plus $1,000 per dependent if head of household, or $16,400 or less plus $1,000 per dependent if married filing a joint return, you qualify for No Tax Status and are not required to pay any Massachusetts income taxes.
1. Enter your total 5.2% income from Form 1, line 10. Not less than "0" (Add back any Abandoned Building Renovation deduction claimed on Schedule(s) C and/or E before entering an amount in line 1.)
 

$9,500

2. Add Schedule Y, lines 1 through 10
 

$0

3. Subtract line 2 from line 1. Not less than "0"
 

$9,500

4. Enter total Massachusetts bank interest or the interest exemption amount, whichever is smaller, from Form 1, line 5a or line 5b

Note: If Form 1, line 10 is a loss, combine Form 1, line 10 with the smaller amount of total Massachusetts bank interest or the interest exemption amount. Enter the result in line 4, unless the result is a loss. If the result is a loss, enter "0." 

$0

5. Enter amount from Schedule B, line 35. If there is no entry in Schedule B, line 35 or if not filing Schedule B, enter the amount from Form 1, line 20
 

$4,000

6. Enter the amount from Schedule D, line 19. Not less than "0." (If filing Schedule D-IS, Installment Sales, see the Schedule D-IS instructions, available at www.mass.gov/dor, for the amount to enter in line 6.) 
 

$0

7. Add lines 3 through 6

$13,500

If you are single and the total in line 7 is $8,000 or less, you qualify for No Tax Status. Fill in the oval in line 27, enter "0" in line 28 and omit lines 29 and 30. Also enter "0" in line 31 and complete Form 1. However, if there is an amount entered in line 25, Credit Recapture Amount and/or additional tax on installments sales, enter the amount in line 28 and complete line 30. If you are single but do not qualify for No Tax Status, and your total in line 7 is $14,000 or less, complete Form 1, line 28 and see Form 1, line 29 instructions for the Limited Income Credit. If you are filing as head of household or married filing a joint return, compare line 7 with the table below to see if you may qualify for No Tax Status or the Limited Income Credit.
 
Number of dependents
(from Form 1,
line 2b):
Head of Household.
Line 7 of the AGI worksheet is less than or equal to:
Married filing a joint return.
Line 7 of the AGI worksheet
is less than or equal to:
0

$14,400                           $25,200

$16,400                            $28,700

1

$15,400                           $26,950

$17,400                            $30,450

2

$16,400                           $28,700

$18,400                            $32,200

3

$17,400                           $30,450

$19,400                            $33,950

4

$18,400                           $32,200

$20,400                            $35,700

5

$19,400                           $33,950

$21,400                            $37,450

6

$20,400                           $35,700

$22,400                            $39,200

 


you may qualify 
for No Tax Status



 

you may qualify
for the Limited
Income Credit


 


you may qualify 
for No Tax Status



 

you may qualify
for the Limited
Income Credit


 
No Tax Status:
Income threshold for single regardless of dependents is $8,000. Taxpayer's Massachusetts adjusted gross income of $13,500 does not qualify for no tax status.

Limited Income Credit (LIC):

Since Massachusetts adjusted gross income is $14,000 or less, this taxpayer may qualify for LIC.
2014 Form 1, Line 29 Worksheet - Limited Income Credit (Only if Single, Head of Household, or Married Filing Jointly)
If you do not qualify for No Tax Status, but you are single and your Massachusetts AGI is between $8,000 and $14,000, or if you are filing as head of household and your Massachusetts AGI is between $14,400 and $25,200 plus $1,750 per dependent, or if you are married filing a joint return and your Massachusetts AGI is between $16,400 and $28,700 plus $1,750 per dependent, you may qualify for the Limited Income Credit. This credit is an alternative tax calculation that can result in a significant tax reduction for people whose income is close to the No Tax Status threshold.
Line 1. Enter amount from line 7 of Massachusetts AGI Worksheet

$13,500

Line 2. Enter $8,000 if single. If married filing a joint return or head of household, enter the amount from the No Tax Status column of the No
Tax Status/Limited Income Credit Chart

$8,000

Line 3. Subtract line 2 from line 1

$5,500

Line 4. Enter in line 4 the amount of tax from Form 1, line 28 less any Credit Recapture Amount
entered in line 25 and/or Additional Tax on Installment Sales on line 26

$693

Line 5. Multiply line 3 by 10% (.10)

$550

Line 6. If line 4 is smaller than line 5, you are not eligible for this credit. Enter "0." If line 4 is larger than line 5, subtract line 5 from line 4 and enter the result here and in line 29 on Form 1

$143

Line 4 Tax Computation: 
5.2% income$9,500
less exemptions($5,400)
taxable income$4,100
tax rate.052
tax $4,100 x.052$213
  
12% income$4,000
tax rate.12
tax $4,000 x.12$480

Total tax ($213+$480)

$693

Example #4 - Nonresident Working in Massachusetts Who Qualifies for both EIC and LIC

Husband and wife, full year residents of Rhode Island
Married filing joint for Massachusetts
Dependents = 3 (ages 11, 16, 18)

W-2 information:

 Husband's W-2: Wife's W-2: 
 RI wages$9,286MA wages$10,214
 State W/H$130State W/H$510
 SS W/H$645SS W/H$230
 Medicare tax W/H$150Medicare tax W/H$75


Other Income:

  • US Treasury bond interest = $200

Deductions and Credits:

  • Rent paid = $750 per month in Rhode Island
  • Federal Earned Income Credit = $2,173
2014 Form 1-NR/PY 

Line 1. Filing Status - Married Filing Joint Return

 

Line 3. Total Income from U.S. 1040, Line 22 (combined wages & interest)

$19,700

Line 4. Exemptions

 

4a Personal exemptions
4b Number of dependents 3 x 1,000
$8,800
$3,000
Line 4f. Total exemptions

$11,800

Line 5. Wages$10,214
Line 12. TOTAL 5.2% INCOME$10,214
Line 14 NONRESIDENT DEDUCTION AND EXEMPTION RATIO:
14a. Total 5.2% income (from line 12)$10,214

14b. Interest Income (smaller of Line 7a or 7b)

$0

14c. Total capital gain income (from Sch B and D)

$0

14d. Total income this return

$10,214

14e. Non-Massachusetts source income that would be taxable to a MA resident. (R.I. wages included; interest from U.S. Treasury bonds excluded)

$9,286

14f. Total income. Add 14d and 14e (gross income that would
be included by a full year Mass. Resident)

$19,500

14g. Deduction and Exemption ratio 14d/14f

.5238
Line 15. Amount paid to Soc. Sec.(deduction must be directly related to income reported $230 + $75)$305
Line 17. Number of dependent members of household. Not more than two: a. 1 x $3,600 = $3,600 * .5238 (Nonresidents multiply by 14g)$1,886
Line 20. TOTAL DEDUCTIONS$2,191
Line 21. 5.2% INCOME AFTER DEDUCTIONS$8,023
Line 22. Exemption amount a. $11,800 * .5238 (Nonresidents multiply by 14g)$6,180
Line 23. 5.2% INCOME AFTER EXEMPTIONS$1,843
Line 25. TOTAL TAXABLE 5.2% INCOME$1,843
Line 26. TAX ON 5.2% INCOME$96
Line 32. TOTAL INCOME TAX$96
Line 33. Limited Income Credit$86
Line 35. Total Credits$86
Line 36. TAX AFTER CREDITS$10
Line 40. TAX AFTER CREDITS, CONTRIBUTIONS, USE TAX and HC PENALTY$10
Line 41. Massachusetts income tax withheld$510
Line 45. Earned income Credit a. $2,173 x .15 = 326
* .5238 Qualifying children 2 (Nonresidents multiply by 14g )
$171
Line 48. TOTAL. Add lines 40 through 45$681
Line 49. OVERPAYMENT. If line 40 is smaller than line 48,
subtract line 40 from line 48
$671

Does the Taxpayer have a Filing Requirement?
Massachusetts source income
Total Income from all sources
Ratio of Massachusetts
Personal Exemption
= $10,214
= $19,500
= $10,214/19,500= .5238
= $8,800 x .5238 = $4,609

Since Massachusetts gross income of $10,214 exceeds the pro-rated personal exemptions of $4,609, this nonresident taxpayer is required to file a return.

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 full year Massachusetts residents filing jointly with three dependents, taxpayers' Massachusetts adjusted gross income is $19,500 which exceeds the maximum amount allowable to qualify for NTS; amount may, however, qualify taxpayers for LIC. 

2014 Schedule NTS-L-NR/PY. No Tax Status and Limited Income Credit
Line 1.Total 5.2% income from this return (from Form 1-NR/PY, line 12

$10,214

Line 2.Adjustments to income (enter the total of Schedule
Y, lines 1 through 10)
 
Line 3.Adjusted 5.2% income from this return. Subtract
line 2 from line 1. Not less than "0"

$10,214

Line 4.Interest exemption uses (from form 1-NR/PY, enter
the smaller of line 7a or line 7b)
 
Line 5.Adjusted gross interest, dividends and certain capital
gains (from Schedule B, line 35.) If there is no entry
in Schedule B, line 35, or if not filing Schedule B,
enter the amount from Form 1-NR/PY, line 24. Not less than "0"
 
Line 6.Long-term capital gain income. From Schedule D
line 18. Not less than "0"
 
Line 7.Additional income/loss while a nonresident/part-year
resident. See instructions

$9,286

Line 8.Total income. Combine lines 3 through 7. Not less
than "0"

$19,500

Line 9.Additional adjustments to income while a nonresident/
part-year resident. See instructions
 
Line 10.

Massachusetts Adjusted Gross Income (AGI). Subtract line 9 from line 8. Not less than "0 "

If you are single and the total in line 10 is $8,000 or less, you qualify for No Tax Status. Fill in the oval in line 30, enter "0" in line 31 and continue completing Form 1-NR/PY. If you are single but do not qualify for No Tax Status and your total in line 10 is $14,000 or less, go to line 13 to see if you qualify for the Limited Income Credit

$19,500

Line 11.If married and filing a joint return, multiply the number of Dependents (from Form 1-NR/PY, line 4b) by $1,000 and add $16,400 to that amount. If head of household, multiply the number of dependents (from Form 1-NR/PY, line 4b) by $1,000 and add $14,400 that amount. If line 10 is less than or equal to line 11, you qualify for NTS. See the instructions from Form 1-NR/PY, line 30

$19,400

Line 12.If you do not qualify for No Tax Status and you are married and filing a joint return, multiply the number of dependents (from Form 1-NR/PY, line 4b) by $1,750 and add $28,700 to that amount. If head of household, multiply the number of dependents (from Form 1-NR/PY, line 4b) by $1,750 and add $25,200 to that amount. Enter the result here. If line 10 is less than or equal to line 12, you may qualify for the Limited Income Credit. Go to line 13

$33,950

Line 13.No Tax Status threshold. Enter $8,000 if single.
If married filing a joint return or head of household, enter the amount from line 11

$19,400

Line 14.Income for Limited Income Credit. Subtract line 13 from line 10

$100

Line 15.Tax before adjustments (from Form 1-NR/PY, line
31)

$96

Line 16.Tax for Limited Income Credit. Multiply line 14 by
10% (.10)

$10

Line 17.

 

Limited Income Credit. Subtract line 16 from
line 15 and enter the result here and in line 32 of
Form 1-NR/PY. If line 15 is smaller than line 16,
you are not eligible for this credit.

$86


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