I am currently getting a bunch deducted from my paychecks for Mass state tax. works in NH, and the other in MA, there could be considerable tax savings. If you are working entirely remotely in New Hampshire, and have been for some time, it is worth asking your employer to reclassify you as an NH employee, . New Hampshire is challenging a Massachusetts measure that continues to tax nonresidents that formerly commuted to work in the Bay State, but now work from home because of the pandemic. For types of Massachusetts sourced income that is not covered by treaties, report such income and pay tax on Form 1-NR/PY - Nonresident or Part-Year Resident Income Tax Return, or If there is no treaty between your country and the U.S., report and pay tax on income from Massachusetts sources on Form 1-NR/PY - Nonresident or Part-Year Resident Income Tax Return. However, it is not the only expense to be concerned with. I believe NH will withhold the MA tax from your paycheck. only a proportionate share of income for the time worked in MA is taxable to the state. With an increased standard deduction, this means you would need more “other deductions” to surpass this amount. If you would like help reviewing your tax situation and your overall financial plan we'd love to get in touch. With that tax savings you could go on a nice cruise or add some additional savings to your retirement account (which is something we financial planners always think about!). If you would like help reviewing your tax situation and your overall financial plan we'd love to get in touch. NH doesn't tax you on wages, so you can't get a credit for the income taxes you'll pay to MA. According to the July 21 … This is true whether you live in MA, or just work in it. You inquire whether the Company is required to withhold Massachusetts income taxes from the wages of these employees. to " Did you make money in any other states?" This will have a direct impact on how much you pay for gas. "PA-NJ Tax Agreement." Where you work (and where you intend to continue to work) is the most important factor. ur overall expenses. A long commute can end up costing you more than anticipated if you don’t track it. But that is the way of things; Massachusetts is clearly within its rights to tax income earned in the state. Governor Baker’s administration has clarified it will continue to tax out-of-state residents who normally go to work in Massachusetts each morning, even if they continue to work from home due to restrictions, likely until the end of 2020. Favorite Answer As a MA resident, MA will tax your world-wide income from all sources. More than that, if you split your working time between MA and NH, usually only a proportionate share of income for the time worked in MA is taxable to the state. Visit our Contact Page to schedule an appointment or reach out to our team. 3  https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020#:~:text=The%20standard%20deduction%20for%20married,%24400%20from%20the%20prior%20year. Knowing where your money is going and why is crucial to saving and reaching your long-term, Since taxes are inevitable, saving money on them is often an overlooked. As many in New England know, Massachusetts has an income tax. So, if you work in MA and your spouse is in NH, make sure you don’t include your spouse’s income on the MA tax return. 2021 Milestone Financial Planning © - Do not copy. Accessed Oct. 20, 2020. You might even end up paying more in taxes since NH is known for generally having a high property tax! Although this has been implemented by Massachusetts, New Hampshire plans to review the legality of the order, and likely dispute it. But considering possible additional expenses because of having less time is an important aspect of fine tuning your budget. In turn you may hire landscapers to take care of, want to do with it. able to prorate your income as you have been able to in previous years going forward. If you work in one of these nine states but live in one of the 41 states (plus the District of Columbia) that do impose state income taxes, you will generally pay only resident state income taxes for the state where you live. All rights reserved. "Reciprocal Agreements." If you are working entirely remotely in New Hampshire, and have been for some time, it is worth asking your employer to reclassify you as an NH employee. make sure you don’t include your spouse’s income on the MA tax return. However, some income, like Social Security or certain pensions won’t be. I know that if you work from home in NH, you will not incur MA income tax for those days. under the Personal - What to Know About NH's Dividend and Interest Tax, My Property Taxes Are What!? As of this writing the review has not been completed, and whether this order will stand for NH residents working in MA is currently unknown. This is my first year not working in NH. If a long commute means that you will likely need to get a new car every 5 years instead of 10, that’s a large expense tha. During a Thursday public hearing via video, New Hampshire officials voiced disapproval for a Massachusetts tax rule that forces out-of-state residents to pay Massachusetts income taxes … If you claim MA as your state of residence in TurboTax, all state income from all sources (including NH) will be included on your MA resident state income tax return. In … Accessed Oct. 20, 2020. Lol I live and work in … What income gets reported where? If a long commute means that you will likely need to get a new car every 5 years instead of 10, that’s a large expense that may go unnoticed because it is infrequent. Yes. It’s been said that time is money. Does this count towards "not working in MA" for income tax purposes or is it ONLY working from home? If you don't have good records this year that's all right, because now you know what you'll need going forward. However, MA will then allow you a creditfor the taxes you already paid to NH on that same income. The same holds true when the situation is reversed. All MA residents pay MA income taxes regardless of where they work. you’ll now need to pay for additional after school services. You won't pay taxes on the same money twice, even if you don't live or work in any of the states with reciprocal agreements. "NJ Income Tax – PA/NJ Reciprocal Income Tax Agreement." err on the side of caution and attribute this income to Massachusetts for 2020. Living in NH and working in MA can be tricky but it doesn't have to be. However, looking through the narrow lens of financial planning, we have a few factors you should consider: Where you work (and where you intend to continue to work) is the most important factor. Another important consideration is that if your spouse does not work in the state, none of their income is taxable to MA. MA doesn't have an earned incometax, they have a general income tax. New Hampshire; If you live in one of these states, you don’t need to file a resident return (unless you live in TN or NH and have interest and dividends income). Do check out other aspects. Yep, MA will tax your income from New Hampshire if you live in MA. I live in Massachusetts and work in New Hampshire. @BigApple251 -- According to the US Department of Labor, you should file for unemployment in the state where you worked. 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