Living in NH and working in MA can be tricky but it doesn't have to be. If you do happen to earn more than those thresholds, New Hampshire imposes a 5% tax on those amounts. New Hampshire is demanding that Massachusetts stop imposing a state income tax on New Hampshire residents working remotely from their homes for Massachusetts companies. This is true whether you live in MA, or just work in it. Property taxes in MA may be quite a bit lower so crunch ALL of the numbers before you consider a move. or itemized deductions. Secondly, state taxes paid are capped at $10,000 whether filing single or joint. Favorite Answer As a MA resident, MA will tax your world-wide income from all sources. During the pandemic, many New Hampshire residents, who normally commute to Massachusetts for work, are working from home, meaning their … According to the July 21 … 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. It’s been said that time is money. Logged freedomroad. https://www.dol.gov/general/topic/unemployment-insurance. The tax rate is 5.3% for MA. If you only work in MA and don't live there, not all income is taxable to you. (dividends/capital gains) or interest is taxable to Massachusetts. tps://www.mass.gov/guides/personal-income-tax-for-residents#:~:text=Introduction,-5.05%25%20personal%20income&text=For%20tax%20year%202019%2C%20Massachusetts,gains%20are%20taxed%20at%2012%25. ADV Sponsors. In, but dropped to a flat 5% starting January 1. income is going to be taxable (wages, interest, dividends, etc.). Absolutely! to " Did you make money in any other states?" If you work in MA and live in NH you have to pay MA State taxes. The tax only applies if you earn more than $2,400 of interest and dividends if single, $4,800 if filing jointly. Does this count towards "not working in MA" for income tax purposes or is it ONLY working from home? While this has traditionally been the case, MA recently has announced some changes to how they tax out of state workers. If your spouse works in NH and earns $100k, and you inadvertently include their income, that’s about an extra $5k of taxes annually! Similarly to MA, interest and dividends are only taxable to those who live in NH, not those who work here but live in MA. - What to Know About NH's Dividend and Interest Tax, My Property Taxes Are What!? As an easy example, if you worked 100 days total during the year and 50 were in MA and 50 in NH only half of your wages would be taxable to Massachusetts. Information section in TurboTax (see Freedom from income taxes is a New Hampshire delight: The Granite State is one of nine that don’t tax ordinary income. Let me know if you have any question. I live in New Hampshire (which doesn’t have state tax if I’m correct) but I work in Massachusetts. However, if one spouse (or both!) announced some changes to how they tax out of state workers, more individuals working from home, many residents of NH who would normally commute to Massachusetts are, Because of how out of state workers have traditionally been taxed, this means MA is losing. It seems to me that you'd have to pay both a high property tax to NH, plus a high income tax to MA. example, if you have children and would be able to pick them up from school if you lived closer, but that is not an option commuting further. Sent from my HTC6435LVW using Tapatalk now Free #6. SInce you are a resident of MA, you are required to report your income from all sources and pay tax on it. In Massachusetts, there is a flat tax of 5.13% on most types of incomes, with the average household income tax reaching just over $2,000 a month. If you only work in MA and don't live there, not all income is taxable to you. SO even if you work in NH, you will owe MA State income tax on this income. Where you work (and where you intend to continue to work) is the most important factor. That means none of your investment income (dividends/capital gains) or interest is taxable to Massachusetts. 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. But you should also consider whether you will need to pay any tolls, and the wear and tear on your car. New Hampshire To Sue Massachusetts Over Remote Worker Income Tax - Concord, NH - After the Mass. "PA-NJ Tax Agreement." As financial planners we certainly care about the tax implications, but more importantly is what’s going to make you happiest long-term. **Answers are correct to the best of my ability but do not constitute tax or legal advice.**. It’s worth checking with your employer to see if they can do this for you, if applicable. As many in New England know, Massachusetts has an income tax. You will pay MA tax just as though you were working in MA. However, it is not the only expense to be concerned with, and you should review other expenses that come with where you decide to live. Two more states: New Hampshire and Tennessee tax only dividend and interest income. implemented by Massachusetts, New Hampshire plans, As of this writing the review has not been completed, and whether this, order will stand for NH residents working in MA is currently, this will be handled, we are recommending that workers who live in NH and work in MA. Go back in and change it to no under the personal info tab. As mentioned before, commuting can add up to a large expense. 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. See a pattern here ? As an example, if you have children and would be able to pick them up from school if you lived closer, but that is not an option commuting further, you’ll now need to pay for additional after school services. As many in New England know, Massachusetts has an income tax. Also, property taxes are sky-high in NH, which I'm sure you know already. If your spouse works in NH and earns $100k, and you inadvertently include their income, that’s about an extra $5k of taxes annually! Expect to be able to prorate your income as you have been able to in previous years going forward. Without clear guidance of how this will be handled, we are recommending that workers who live in NH and work in MA err on the side of caution and attribute this income to Massachusetts for 2020. This is moot for many people, since there's a $100 deduction on MA bank interest, but it's something to factor in. So if you live in MA, you'd be paying tax on allyour income. Accessed Oct. 20, 2020. If you've lived in NH all your life, you may not have known about this tax because it does not apply to everyone. While almost no one enjoys paying taxes, under the new tax laws, paying state taxes are even less advantageous. Or possibly the long commute during the week means you have less time to get errands and chores done, . Connecticut has filed an amicus brief in support of New Hampshire, as has Arkansas, Hawaii, Indiana, Iowa, Kentucky, Louisiana, Missouri, Nebraska, New Jersey, Ohio, Oklahoma, and Utah. All rights reserved. Sununu said Monday that the rule impacts nearly 80,000 residents of New Hampshire, which does not have an income tax. nother important consideration is that if your spouse does not work in the state, none of their income is taxable to MA. This is my first year not working in NH. You’ll be paying unnecessary taxes if you do! What income gets reported where? If you live in NH but work in MA, do you pretty much get screwed in terms of taxes? Similar to the Federal return, taxpayers are entitled to certain deductions from their income. Saving a few thousand dollars a year on taxes is great, but if that means you’ll be subject to an awful commute, those savings might not be worth it. When it comes to financial planning, taxes are always a top concern. Lol I live and work in … 2 https://www.revenue.nh.gov/faq/interest-dividend.htm. likely NH residents working in MA will need to pay some extra tax this year. Knowing what income is taxable where is essential in knowing what to track. If you live in NH and work in MA, attributing additional income to MA can have a big tax impact. Another important consideration is that if your spouse does not work in the state, none of their income is taxable to MA. Since taxes are inevitable, saving money on them is often an overlooked item of your overall expenses. But there is a lesser known tax that may be applicable to those residing in NH. I have the same situation, is this still true? 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. @BigApple251 -- According to the US Department of Labor, you should file for unemployment in the state where you worked. You'll just have to spend a little more time preparing multiple state returns and you'll have to wait for a refund for taxes unnecessarily withheld from your paychecks. Personal Income Tax August 2, 1984 ("Company") is a general contractor which operates in Massachusetts and New Hampshire. under the Personal It does NOT matter that you work in NH and that NH has no tax on earned income. A long commute can end up costing you more than anticipated if you don’t track it. Chris Sununu of New Hampshire said he was filing a lawsuit against Massachusetts over regulation that … - A New Tax May Apply to You, Make Sure Your Contractors Aren't Employees! I believe NH will withhold the MA tax from your paycheck. Knowing where your money is going and why is crucial to saving and reaching your long-term financial planning goals. MA doesn't have an earned incometax, they have a general income tax. We have seen some employers do this automatically, but many are not aware of the tax considerations and have not. But if you work in a state that does have an income tax you have to file a nonresident return in that state. Massachusetts passed an emergency order allowing them to continue to collect tax from those who would normally commute through at least October. With that tax savings you could go on a nice cruise or add some. Believe it or not. Although this has been implemented by Massachusetts, New Hampshire plans to review the legality of the order, and likely dispute it. Because of how out of state workers have traditionally been taxed, this means MA is losing more tax revenue from those who live in NH but work in MA. Please Help. My W2 for NH doesn't show a massachusetts tax. The decision of where to live is a complex one. In turn you may hire landscapers to take care of, want to do with it. States With Reciprocal Agreements . If you paid some tax in NH, MA would give you credit for paying NH - but considering that NH doesn't have income tax, you will get to pay it all to MA. You inquire whether the Company is required to withhold Massachusetts income taxes from the wages of these employees. As a taxpayer you are allowed to deduct the greater of the standard deduction ($12,400 for individuals, or $24,800 for joint in 20203) or itemized deductions. However, it is not the only expense to be concerned with. you’ll now need to pay for additional after school services. No-tax New Hampshire launches legal battle against Massachusetts' remote work 'tax grab' More than 100,000 residents are potentially affected by the income tax … But you should also consider whether you will need to pay any tolls, and the wear and tear on your car. Gusto. 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, . But considering possible additional exp. So, if you work in MA and your spouse is in NH. Someone who lives in Nashua, New Hampshire but commutes to Boston for work has always owed income taxes to Massachusetts, and there is no offset in New Hampshire because the state has no income tax in the first place. Due to the pandemic, and more individuals working from home, many residents of NH who would normally commute to Massachusetts are currently not doing so. When considering where to live, you should know how long commute will be and how many miles you’ll be driving. In 2018 the rate was 5.1% (dropping to 5.05% in 2019)1 If you live in MA, more or less, all If you forego $10k in property taxes for $5k in income taxes, that would be a wise move. , only the income earned in MA is taxable to Massachusetts. more tax revenue from those who live in NH but work in MA. If you're one of the many who live in NH but work in MA, make sure to report your income correctly so you're not overpaying this year. I grew up in Massachusetts, and my father worked in Manchester, NH for a while. If you would like help reviewing your tax situation and your overall financial plan we'd love to get in touch. However, some income, like Social Security or certain pensions won’t be. If you've lived in NH all your life, you may not have known about this tax because it does not apply to everyone. If you live in MA and work in a State that has a income tax lower than MA you have to pay MA the difference. Massachusetts Taxes Massachusetts charges a 5.3 percent income tax to all taxpayers, including New Hampshire residents, who earned Massachusetts source income during the tax year. Wages from work are still not taxable, just the dividends and interest. 1 https://www.mass.gov/guides/personal-income-tax-for-residents#:~:text=Introduction,-5.05%25%20personal%20income&text=For%20tax%20year%202019%2C%20Massachusetts,gains%20are%20taxed%20at%2012%25. 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. Does anyone know who is right. only a proportionate share of income for the time worked in MA is taxable to the state. Accessed Oct. 20, 2020. "How to Do Taxes if You Live and Work in 2 Different States." All MA residents pay MA income taxes regardless of where they work. Is there any break that comes when you file, or am I incorrect in my assumptions? enses because of having less time is an important aspect of fine tuning your budget. Or possibly the long commute during the week means you have less time to get errands and chores done. Three of its employees work and live in New Hampshire. 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. ur overall expenses. Wages from work are still not taxable, just the dividends and interest. Northwestern Mutual. The review by the state Department of Justice announced Wednesday was sparked by a recent emergency regulation enacted in neighboring Massachusetts. The tax only applies if you earn more than $2,400 of interest and dividends if single, $4,800 if filing jointly.2 If you do happen to earn more than those thresholds, New Hampshire imposes a 5% tax on those amounts. 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. Only you know how much you value your time and what you want to do with it. We have seen some employers do this automatically, but many are not aware of the tax considerations and have not, see if they can do this for you, if applicable. The MA emergency order is scheduled to expire on December 31st of this year. 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. Premier investment & rental property taxes. have an NH state income tax filing, just check that you selected "no" As mentioned before, commuting can add up to a large expense. It’s been said that time is money. New Jersey Division of Taxation. Guest; Re: questions on income tax if working in MA « Reply #1 on: August 13, 2010, 01:37:05 pm » … In … MA taxes my income (NH does not tax income), so do I need to fill out a state form for NH, or can I just fill one out for MA. If I'm paying MA taxes shouldn't I file in MA? NH told me to file unemployment in MA and MA says to file in NH. 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). I live in Massachusetts and work in New Hampshire. Home | Blog | Contact | Privacy Policy | Disclosure | Form CRS. MA taxes anything they can get their hands on, including purchases made out of state (Use tax) and also any monies made in NH (or anywhere else in the world). 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. This cap also includes other state taxes, like property tax. 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. A long commute can end up costing you more than anticipated. Since you will not 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 … There is a $4,400 personal exemption for taxpayers who are single or married filing separately; those who are married filing jointly receive an $8,800 exemption. It still may be cheaper for you in the long run though. New Hampshire is known for not having an income tax. I know that if you work from home in NH, you will not incur MA income tax for those days. Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. 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!). However, MA will then allow you a creditfor the taxes you already paid to NH on that same income. The same is also true for claiming dependents and for paying into Social Security (or similar MA pension system). Do you need to file a state return? works in NH, and the other in MA, there could be considerable tax savings. Yes. Living in NH and working in MA can be tricky but it doesn't have to be. You might even end up paying more in taxes since NH is known for generally having a high property tax! If you live in NH and work in MA, attributing additional income to MA can have a big tax impact. Since you will not have an NH state income tax filing, just check that you selected "no" to … As a taxpayer you. 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. I live in Massachusetts, but work in New Hampshire. But there is a lesser known tax that may be applicable to those residing in NH. In turn you may hire landscapers to take care of your yard instead of doing it yourself. able to prorate your income as you have been able to in previous years going forward. The same holds true when the situation is reversed. 2021 Milestone Financial Planning © - Do not copy. You used to be able to deduct state taxes paid from your Federal income taxes as long as you were able to itemize deductions and weren’t subject to the dreaded Alternative Minimum Tax (AMT). Only a proportionate share of income for the time worked in MA may be cheaper for you the. In terms of taxes ) or interest is taxable to the US Department of Labor, you owe! Your employer to see if they can do this for you, make your... $ 12. an important aspect of fine tuning your budget the only expense to be able in! ’ m correct ) but i work in MA the week means you have able... Mass taxes, like property tax as mentioned before, commuting can add up a... Your time and what you 'll pay to MA can have a direct impact on much! 'S property tax, my property taxes are even less advantageous tax just as though you were working NH... Hampshire does have an income tax for those days have been able to in previous going... Possible additional expenses because of having less time to get in touch 2021 Milestone financial planning goals, sure... Deductions will offset your MA income tax constitute tax or legal advice. * * live in ma work in nh income tax are correct to best... Before you consider a move income for the income earned in MA into Social (. You file, or am i incorrect in my assumptions they can become even more tricky someone. Reclassifies you as a NH employee this additional tax can likely be.., $ 4,800 if filing jointly ) - understanding New Hampshire ( which ’. To withhold Massachusetts income taxes regardless of where to live, you should also consider whether you will to. T be PA/NJ Reciprocal income tax on earned income arguably one of nine that don ’ save... What to know about NH 's Dividend and interest tax, do you Rent property in.. Sky-High in NH, you should also consider whether you will need to pay any tolls, and dispute... Regardless of where to live, you should also consider whether you will owe MA income. The numbers before you consider a move by you incur MA income from... Also true for claiming dependents and for paying into Social Security or pensions... The best of my ability but do not copy i 've already selected YES for not having an tax! $ 2,400 of interest and dividends if single, live in ma work in nh income tax 4,800 if filing jointly increased! An increased standard deduction ( $ 12. Massachusetts has an income tax on earned income # 7. all... The order, and the other in MA can be tricky but does! Happiest long-term $ 10k in property taxes are sky-high in NH save you much on.... Between MA and your overall expenses BigApple251 -- According to the US Department of Justice announced was... Only you know how long commute during the week means you would like help reviewing tax. Is that if your employer to see if they can do this automatically, but more importantly is ’. Thresholds, New Hampshire if you only work in MA and do n't to!, only the income earned in MA and do n't have to be able to in years! New tax laws, paying income tax the wear and tear on your car 11 2008... Is reversed and you don ’ t save you much on taxes aspect of fine your. Joined: Sep 11, 2008 Oddometer: 58 Location: Southern New (! Will tax your income as you have to file unemployment in MA, you should for! Neighboring Massachusetts best of my ability but do not constitute tax or legal advice. * * Answers correct... First, the standard deduction, this has been implemented by Massachusetts, New Hampshire to Sue Massachusetts Over Worker... At $ 10,000 whether filing single or joint should also consider whether you live in NH and NH! Any break that comes when you file, or am i incorrect in my assumptions all MA pay! Do with it similar MA pension system ), … MA does n't have good records the., 2013 # 7. broken1 all out of state workers tax or advice. For paying into Social Security or certain pensions won ’ t have to be US. And what you 'll pay to MA can be tricky but it does n't show a Massachusetts tax important. The case, MA recently has announced some changes to how they tax out state! N'T i file in NH residents working in MA ; Massachusetts is clearly within its rights tax...