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Letter Ruling

Letter Ruling Letter Ruling 84-52: Pension Income Related to Employment While a Non-Resident

Date: 08/01/1984
Organization: Massachusetts Department of Revenue
Referenced Sources: Massachusetts General Laws

Personal Income Tax


August 1, 1984

While a resident of Connecticut, you began participating in a contributory profit-sharing/retirement plan with a Connecticut corporation. on July 1, 1982,

You moved to Massachusetts, while maintaining your employment with the Connecticut corporation. On February 18, 1983, you terminated your employment with the corporation and, soon after, received a lump-sum distribution comprised of your contributions to the plan, your employer's contributions, and interest thereon. You inquire as to the Massachusetts income tax treatment of the lump-sum distribution.

Massachusetts residents are taxed on their taxable income, which is their federal gross income with certain adjustments made pursuant to General Laws Chapter 62, Sections 2 and 3. Income from annuity stock bonus, pension, profit-sharing, annuity or deferred-payment plans or contracts described in Internal Revenue Code Section 404 should be deducted ~from federal gross income in the determination of Massachusetts gross income, until an aggregate amount of such income has been deducted equal to the aggregate of all amounts previously subjected to Massachusetts income taxation. (G.L. c. 62, § 2(a)(2)(F)).

Massachusetts gross income is comprised of Part A gross income, taxable at ten percent, which consists of dividends, net capital gain and certain interest, and Part B gross income, taxable at five percent, which includes the remainder of Massachusetts gross income. (G.L. c. 62, § 2(b)).

The amount you received as a lump-sum distribution, less 'any amount previously subjected to Massachusetts income taxation, is subject to Massachusetts income taxation and is includible in your Part B taxable income.

Very truly, yours,

Commissioner of Revenue


LR 84-52

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