1 Residence, 2 State Returns

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    1 Residence, 2 State Returns

    Hello.  I’m a Massachusetts resident, but half-way through 2012 (on July 1), my company moved our team from Boston to a town in Rhode Island. (I did not move.)  My W-2 shows a full year’s worth of income for MA and 6 month’s worth for RI.    Is there anything that I should know about filing 2 state returns?  Does it matter which I file first?  (RI first and then tax credits for MA?)

     

    Thanks.

    H

     
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    Re: 1 Residence, 2 State Returns

    In response to H_in_Newton's comment:

    Hello.  I’m a Massachusetts resident, but half-way through 2012 (on July 1), my company moved our team from Boston to a town in Rhode Island. (I did not move.)  My W-2 shows a full year’s worth of income for MA and 6 month’s worth for RI.    Is there anything that I should know about filing 2 state returns?  Does it matter which I file first?  (RI first and then tax credits for MA?)

    Thanks.

    H

    Dear H_in_Newton:

    You will filing a Non-Resident RI return and claiming a credit agianst your MA taxes for the taxes paid to RI on the same income.  If you're preparing your returns by hand, you will need to prepare the RI return first, in order to determine the taxes you pay there.  You will need to prepare a Schedule Z with your MA return to comoute the credit allowable agianst your MA taxes.  This will be limited to the lesser of the tax paid to the other state or the amount of tax deemed to be due to MA at MA tax rates on the same income (no credit for taxes paid to another state at a higher rate than MA imposes).  A good tax program will prepare the returns simultaneously and compute the credit for the Non-Resident state against the tax in the home state.

    Hope this helps in preparing your returns!

    Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal

    Katz, Nannis + Solomon, P.C.

     

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