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Guide Personal Income Tax for Part-Year Residents

This guide has general information about Personal Income tax for Massachusetts part-year residents. It is not designed to address all questions which may arise nor to address complex issues in detail. Nothing contained herein supersedes, alters or otherwise changes any provision of the Massachusetts General Laws, Massachusetts Department of Revenue Regulations, Department rulings or any other sources of the law.

Table of Contents

Residency Status

If you're a part-year resident with an annual Massachusetts gross income of more than $8,000, you must file a Massachusetts tax return.

You're a part-year resident if you:

  • Move to Massachusetts during the tax year and become a resident, or
  • Move out of Massachusetts during the tax year and end your status as a resident. 

Part-year residents use Form 1-NR/PY Massachusetts Nonresident or Part-Year Resident Income Tax Return.

Use Schedule R/NR – Resident/Nonresident Worksheet to adjust your income, deductions, exemptions and Earned Income Credit.

Additional Resources for Residency Status

Filing Status

For federal purposes, your filing status determines your income tax rate. For Massachusetts purposes, your filing status determines how many personal exemptions you're allowed. For federal purposes, there are 5 filing statuses:

  • Single
  • Married filing a joint return
  • Married filing a separate return
  • Head of household
  • Qualifying widow(er) with dependent child

Massachusetts offers all but the qualifying widow(er) with dependent child. Generally, if you claim this status federally, you qualify for head of household for Massachusetts. 

Reporting on your original tax return

Enter your filing status on either Form 1 or 1-NR/PY, Line 1, and fill in the appropriate oval. Enter your spouse's Social Security number in the appropriate space at the top of the return under taxpayer's Social Security number. If you're married filing joint, both spouses must sign the return.

Exemptions

As a part-year resident, your exemptions are based on days you spent as a Massachusetts resident.

Multiply your exemptions by the Total Days as a Massachusetts Resident ratio (Form 1-NR/PY, Line 3). This ratio is the number of days you were a Massachusetts resident divided by 365 days.

If you have a short taxable year, you're only allowed the exemptions related to the number of days you spent as a Massachusetts resident divided by 365.

Determining Income

As a part-year resident, you're generally taxed on all your income while you're a resident of Massachusetts, received from sources inside or outside of Massachusetts.

Massachusetts gross income is income earned from all sources while a Massachusetts resident.

Deductions

Part-year residents can only take deductions in proportion to the number of days they were a Massachusetts resident. The deduction is multiplied by a fraction, the numerator of which is the number of days in the taxable year the person resided in the Commonwealth and the denominator of which is the total number of days in the taxable year.

In addition to deductions that you will find on the Form 1-NR/PY itself, such as those allowed for FICA, Medicare, RR, U.S. or Massachusetts retirement, certain dependent care expenses, and the rental deduction, there is also a list of deductions that part-year residents are allowed to take on Form 1 NR/PY Schedule Y, more fully explained in the instructions.

Part-year residents may be allowed the following deductions on Schedule Y:

  • Penalty on early savings withdrawal
  • Alimony paid
  • Amounts excludible under MGL ch 41, § 111F or US tax treaty included in Form 1, line 3 or Form 1-NR/PY, line 5
    • Income received by a firefighter or police officer incapacitated in the line of duty, per MGL ch 41, § 111F
    • Income exempt under a US tax treaty
  • Moving expenses
  • Medical savings account deduction
  • Self-employed health insurance deduction
  • Health savings accounts deduction
  • Certain qualified deductions from US Form 1040
  • Certain business expenses from US Form 1040
  • Student loan interest deduction
  • Undergraduate student loan interest deduction
  • Deductible amount of qualified contributory pension income from another state or political subdivision
  • Claim of right deduction
  • Commuter deduction
  • Certain gambling losses
  • Prepaid tuition or college savings program deduction

Credits

As a part-year resident, you may also qualify for certain personal income tax credits, which can reduce the amount of tax you owe.

Business-related credits

See business-related credits you may be able to claim on your personal income tax return.

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC), or Earned Income Credit (EIC), benefits working families with low to moderate incomes. You're entitled to the EITC if you have Massachusetts source earned income and file a tax return, even if you don't owe any tax or aren't required to file.

For part-year residents, the amount of the Massachusetts EITC is limited to 23% of the federal EITC (30% for tax year 2019) multiplied by a fraction, the numerator of which is the number of days in the taxable year the person resided and the denominator of which is the total number of days in the taxable year.

You may be eligible for the credit if you:

  • Had a qualifying child for the taxable year, or
  • Did not have a qualifying child during the taxable year and you meet the following criteria:
  • You lived in the United States for more than one-half of the taxable year
  • You or your spouse had attained age 25 but had not attained age 65 before the close of the taxable year
  • You're not a dependent of another taxpayer during the tax year

You're not eligible for the EITC if:

  • You did not file a Massachusetts return for the tax year.
  • You were a nonresident for the entire taxable year.
  • Your status is married filing separately (however, if you are a victim of domestic abuse living apart from your spouses and unable to file a joint return, you may still be eligible. See Form 1 instructions, line 43 for more information on how to file under this exception); or.
  • You and/or your spouse had investment income that exceeds the limit for the taxable year.

To fill out your return: 

  1. Enter the number of qualifying children you have, if any, in the box on Form 1-NR/PY, Line 47a
  2. Enter the amount reported on your federal return, in the box next to 47b
  3. Multiply the amount reported on U.S. return by 0.23 and enter the amount in Line 47c
  4. Multiply Line 47c by Form 1-NR/PY, Line 3.
  5. Enter the new result in Form 1-NR/PY, Line 47

View maximum EIC credit allowed and more information on the EIC here.

Income tax paid to another state or jurisdiction

You're allowed a credit for taxes due to any other jurisdiction. The credit is available only on income reported and taxed on a Massachusetts return. Note that tax due is different from taxes withheld. For this credit, use the calculated tax due, not tax withheld.

This credit is allowed for taxes paid to:

  • Other states in the U.S.
  • Any territory or dependency of the U.S., including:
    • Puerto Rico
    • The Virgin Islands
    • Guam
    • The District of Columbia
    • Canada or any of its provinces
    You must first reduce the taxes you paid by the amount allowed as a federal Foreign Tax Credit on U.S. Form 1116, claimed or not.
  • New Hampshire for business profits tax (considered an income tax)
  • District of Columbia Unincorporated Business Franchise Tax (UBT)

This credit is not allowed for:

  • Taxes paid to the U.S. government
  • Taxes paid to a foreign country other than Canada or any of its provinces
  • Any city or local tax
  • Interest and penalties paid to another jurisdiction
  • Excise, property tax or franchise tax

See if you qualify for taxes paid to other jurisdictions credit by completing Schedule F, Credit for Income Taxes Paid to Other Jurisdictions.

The credit is the smaller of:

  • Massachusetts income tax on income you reported to the other jurisdiction, or
  • The actual tax you paid to the other jurisdiction

View more information on taxes paid to other jurisdictions credit here.

No Tax Status and Limited Income credit

If your Massachusetts Adjusted Gross Income (AGI) doesn't exceed certain amounts for the taxable year, you qualify for No Tax Status (NTS) and are not required to pay any Massachusetts income tax, but still need to file a tax return.

Adjusted gross income is gross income reduced by certain business expenses and other deductions claimed on Massachusetts Schedule Y, Lines 1 to 10, such as allowable employee business expenses, alimony paid or student loan interest, etc. 
Except for Line 4, these are generally federal allowable deductions.

If you do not qualify for No Tax Status (NTS), but your Massachusetts AGI still doesn't exceed certain amounts, you may qualify for the Limited Income Credit (LIC), which may reduce your tax significantly.

Married filing separate taxpayers do not qualify for either NTS or LIC.

See if you qualify for NTS and LIC by completing Schedule NTS-L-NR/PY, No Tax Status and Limited Income Credit, Lines 1 to 11. Compute your Massachusetts adjusted gross income (AGI) as if you were a Massachusetts resident for the entire taxable year.

While determining whether or not you qualify for NTS, include all non-Massachusetts source income as well as all non-Massachusetts Schedule Y, Lines 1 to 10 deductions. Non-Massachusetts source income is all the income you'd have to report if you were a Massachusetts resident. Report all losses as 0.

If you don't qualify for NTS, you may still be entitled to LIC. Fill out Lines 1 to 15.

See detailed information on No Tax Status and Limited Income Credit.

Residential property credits

View residential property credits you may be able to claim on your personal income tax return here.

Additional Resources for Credits

Image credits:  Triple decker street (George Headley)
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