Tax Law if You Work in Rhode Island but Live in Massachusetts. You may need to file two state tax returns, as well as a federal return, if you live in Massachusetts and work in Rhode Island. Thousands of Massachusetts residents earn wages in Rhode Island, meaning they’re subject to the tax laws of both states.
Do you have to withhold taxes from employees in Massachusetts?
Withholding state income taxes from your employees who reside in or are employed in Massachusetts and sending in those taxes, along with the appropriate form or electronic return, on time.
How to report your income as a Massachusetts resident?
Find out what you should file and how to report your income. End your Massachusetts resident status and establish a residence outside of MA. For nonresident period, you do not have MA source income. End your Massachusetts resident status and establish a residence outside of MA. For nonresident period, you have MA source income.
Can a Massachusetts resident benefit from an income tax treaty?
Resident aliens do not benefit from income tax treaties. If you’re a nonresident, your Massachusetts source income is excluded for Massachusetts purposes if: The income is excluded from federal gross income under an income tax treaty or convention that the United States is a part of.
What happens if you pay more in Rhode Island than in Massachusetts?
In other words, if you paid more to Rhode Island than you would have paid to Massachusetts, you won’t get a credit for the additional Rhode Island tax. If you paid less to Rhode Island than you would have paid in Massachusetts, you may owe additional tax on that income to Massachusetts.
Do you get tax credit if you work in Rhode Island?
The credit you’ll receive is the smaller of those two numbers. In other words, if you paid more to Rhode Island than you would have paid to Massachusetts, you won’t get a credit for the additional Rhode Island tax. If you paid less to Rhode Island than you would have paid in Massachusetts, you may owe additional tax on that income to Massachusetts.
