Flight Crew Members
Nonresidents engaged in providing services on aircraft during flight ("flight crew members") - Definitions:
- "Flight crew" members, a generic term that applies to all individuals who are engaged in providing services on aircraft during flight, such as pilots and flight attendants. Federal rules limit a state's ability to tax a subset of this group, namely "air carrier" employees.
- "Air carrier" employees who are operators because of their commercial flight activities or the size of their aircraft are required to obtain an air carrier certificate.
Massachusetts taxes the following nonresident flight crew members to the extent allowed under federal law:
- nonresident "air carrier" employees who earn more than 50% of their pay in Massachusetts. Employees are deemed to have earned 50% of their pay in a state in which their scheduled flight time in the state is more than 50% of their total scheduled flight time when employed during the calendar year; and
- all other nonresident "flight crew" members who perform services in Massachusetts. Flight crew members are subject to the general rules of Massachusetts taxation for nonresidents, and if subject to tax should allocate and apportion their income according to the general rules at 830 CMR 62.5A.1.
Nonresident Flight Crew Members, Including "Air Carrier" Employees Not Covered by the Federal Limitation - Special Apportionment Rule for Compensation, Effective April, 2008:
Nonresident flight crew members who depart from a Massachusetts airfield and fly in and out of more than one state should allocate, when possible, their income to Massachusetts according to the general rules at 830 CMR 62.5A.1. When flight crew members are unable to establish the exact amount of pay received for services performed in Massachusetts, they should apportion their income to Massachusetts by multiplying the gross income related to their employment, wherever earned, by an apportionment factor, that is, a fraction, the numerator of which is Massachusetts workdays and the denominator of which is total workdays.
A Massachusetts workday is any workday that a flight crew member flies out of Massachusetts. For workdays on which a flight crew member does not fly out of Massachusetts, the general rule at 830 CMR 62.5A.1(5)(a) applies, and any day part of which is spent in Massachusetts will be treated as a Massachusetts workday, unless the taxpayer can prove that he or she worked outside of Massachusetts for more than half the day. The term "total work days" is the sum of all days that an employee is either flying or is required to be on duty (non-flight workdays).
A nonresident flight attendant works for a corporation that operates two small corporate jets that fly out of Massachusetts. The corporation is not required to obtain an air carrier certificate under federal law. Because the federal limitation on state taxation does not extend to such aircraft operators, the flight attendant is subject to Massachusetts taxation. The flight attendant flies on 180 flights per year, 120 of which depart from the corporate headquarters state of New York; 35 have their departures in Illinois; 25 depart from Massachusetts. During the year, some of the trips require the flight attendant to stay in the destination city for several days while passengers conduct business. Those days are considered to be non-flight workdays. The employee has a total of 14 non-flight workdays, during 2 of which the employee is staying at a hotel in Massachusetts. The apportionment factor Flight Attendant should use in calculating the portion of his compensation taxable in Massachusetts is 25 (the number of workdays the employee flew out of Massachusetts) + 2 (the number of non-flight workdays spent in Massachusetts) / 194 (180 flight days + 14 non-flight days) = 0.1392, which expressed as a percentage is 13.92%.
Motor Carrier Employees
Massachusetts may not tax compensation paid by an interstate motor carrier, motor contract carrier, or motor private carrier to a nonresident employee who performs regularly assigned duties in more than one state either as:
- a vehicle operator;
- a mechanic;
- or freight handler.
These duties must relate directly to a motor vehicle and must be performed on a regularly assigned basis: occasional or minimal assignments do not qualify. Clerical or other administrative duties also do not qualify.
Starting with the 4th quarter 2009, responsibility for collecting wage reporting data has been transferred to the Department of Unemployment Assistance (DUA). Employers, including employers who do not have Unemployment Tax obligations, must file their Quarterly Wage Reports via DUA's QUEST system beginning in January 2010. Visit www.mass.gov/dua/quest for more information.
Massachusetts may not tax compensation paid by an interstate rail carrier to a nonresident employee who performs regularly assigned duties in more than one state either on a:
- bridge, car float, lighter, or ferry used by or in connection with a railroad;
- road used by a rail carrier and owned by it or operated under an agreement; or
- switch, spur, track, terminal, facility, or ground, used or necessary for transportation.
These duties must be performed on a regularly assigned basis: occasional or minimal assignments do not qualify. Clerical or other administrative duties also do not qualify.
Starting with the 4th quarter 2009, responsibility for collecting wage reporting data has been transferred to the Department of Unemployment Assistance (DUA). Employers, including employers who do not have Unemployment Tax obligations, must file their Quarterly Wage Reports via DUA's QUEST system beginning in January 2010. Visit www.mass.gov/uima for more information.
Documentation to Submit with Abatement/Amended Tax Return:
Motor Carrier and Railroad Employees
- Letter from your employer verifying that you are an interstate carrier or railroad employee, identifying your job requirement and stating that you are required to work in more than one state;
- Letter from the transit organization stating that the employee's duties are under the jurisdiction of the Surface Transportation Board if a nonresident employee of a MA rail transit organization.
M.G.L. Chapter 62, Section 5A
Motor Carrier and Railroad Employees
Flight Crew Members