- Massachusetts Source Income
- Nonresident Professional Team Athletes
- Presence for Business in Massachusetts
- Passive Activity Losses
- No Tax Status and Limited Income Credit
Prior to 2003 - Massachusetts Source Income That Was Included:
The Massachusetts courts had interpreted the language "any trade of business, including any employment carried on by the taxpayer in Massachusetts" to mean that the Massachusetts gross income of a nonresident was taxable only when a nonresident taxpayer carried on business activities in Massachusetts during the taxable year in which the income was received.
Prior to 2002 - Nonresident Professional Team Athletes:
Nonresident professional team athletes who performed services in Massachusetts were required to apportion income based on the number of games played in Massachusetts to the total number of games that the athlete was obligated to play during the taxable year.
Prior to 2002 - Presence for Business in Massachusetts:
A nonresident's presence for business in Massachusetts was ordinarily considered to be casual, isolated and inconsequential if it met the requirements of one of the following three tests:
- Ten Days Test:
the nonresident's presence for business in Massachusetts did not exceed ten days in the taxable year, except that a nonresident directly earning or deriving more that $6,000 of gross income from business or employment activities in Massachusetts.
- $6,000 Test:
the gross income from the presence for business in Massachusetts did not exceed $6,000 in the taxable year regardless of the number of days worked in Massachusetts;
- Ancillary Activity Test:
The nonresident's presence for business in Massachusetts was ancillary to the nonresident's primary business of employment duties performed at a base of operations outside of Massachusetts, as with occasional presence in Massachusetts for management reporting or planning, training, attendance at conferences or symposia, and other similar activities which were secondary to the nonresident's primary out-of-state duties.
Prior to 1998 - Passive Activity Losses:
Passive activity losses prior to the January 1, 1988 I.R.C. update were not allowable for Massachusetts purposes. Whereas Massachusetts did not adopt the Federal Tax Reform Act of 1986, passive activity losses generated between the years of 1986 and 1988 were treated as ordinary losses for Massachusetts purposes and would offset other ordinary income. If this created a net operating loss carryover, the loss carryover would not be allowed as Massachusetts does not recognize Net Operating Losses (NOLs) and the benefit would be lost. Adjustments must be made for taxpayers claiming federal passive loss carry forwards from prior to 1988 to exclude these amounts.
Prior December 19, 2003 - No Tax Status and Limited Income Credit Computation for Nonresident Military Taxpayers:
To determine whether or not they qualified for NTS or LIC, military taxpayers were required to report their non-Massachusetts military compensation on line 7 of Schedule NTS-L-NR/PY as non-Massachusetts source income even though Massachusetts did not tax such income.