Mass State Income Tax

In most states the statute of limitations is 4 years, so you could collect money only going 4 years back.

On your NH return, did you take a credit for taxes paid to MA? If yes, then after you recover money from MA, you'll have to pay the accumulated credit to NH.

On your MA return, did you take a credit for taxes paid to NH? If yes, you'll recover a smaller amount that originally expected.

On his what?

R's, John

After all, those in NH Live Free or Die :^)

Thanks for the response, I called Mass dept of revenue and spoke to someone else who said I could file amended returns for the last 3 years.

New Hampshire actually doesn't have a income tax or sales for that matter. Though the property tax is pretty hefty.

Thanks again, Jeff

I remember years ago there was a case where the State of New Hampshire was suing one of its residents because he taped over the slogan "Live Fee or Die" on his license plate. He said it was done for religious purposes.

Yes. Thanks for posting it.

This case was decided by the US Supreme Court, with one of the authors of New Hampshire's brief being a lawyer named David H Souter.

Souter was NH Attorney General at the time, and his personal license plate did not bear the state motto (See note 1).

Sure, and it's worth what it costs.

The income earned on the days you went to Mass is taxable by Mass.

I'm not familiar with MA rules. Under NY rules, if the company were a NY company, and you worked for it sometimes in NY and sometimes at home (for _your_ convenience), all your pay would be taxable by NY. (If you worked at home for the _company's_ purposes, e.g. to see clients who preferred to visit there instead of the company's NY office, or because you had access to tools, equipment, etc. there, then the money earned during the time working there isn't taxable by NY.)

Clearly an unbiased source :-(

That's your decision.

Several of those years, anyway.

The refund would be taxable income for Federal purposes.

Seth

As someone else pointed out, if you were working for a NY employer and spending some time at its NY location, all of your earnings would be subject to NY tax under the infamous "convenience of the employer" rule. Fortunately, as far as I know Massachusetts is not on the short list of states that apply that rule or something similar (Delaware and Pennsylvania being examples). I believe you can file amended returns for years that are open under the statute of limitations. And get your employer to stop withholding MA tax on your salary, except to the extent that you perform the services in Massachusetts.

Katie in San Diego

In article , katiej snipped-for-privacy@yahoo.com (Katie) writes: | On May 21, 6:28 am, jeffdo123 wrote: | > I probably should talk to a tax attorney on this but wondering if | > someone can give me advice. | >

| > I have been working out of my home in New Hampshire as a consultant | > for 5+ years, for a company based in Massachusets. (I go into Mass | > maybe one or twice a year for meetings, that is all.) | >

| > All this time I have been paying state income tax, recently the | > company that I have been consulting for hired me permanently and HR | > thinks I shouldn't be paying income tax. I called the Mass department | > of revenue and they said I should because the company is based in | > Mass. | >

| > Which doesn't make alot of sense to me. Is it worth fighting them on | > this? If I win could I get back the five years of income tax they have | > collected that they didn't have any right to? | >

| >

| | As someone else pointed out, if you were working for a NY employer and | spending some time at its NY location, all of your earnings would be | subject to NY tax under the infamous "convenience of the employer" | rule. Fortunately, as far as I know Massachusetts is not on the short | list of states that apply that rule or something similar (Delaware and | Pennsylvania being examples). I believe you can file amended returns | for years that are open under the statute of limitations. And get | your employer to stop withholding MA tax on your salary, except to the | extent that you perform the services in Massachusetts.

At some point does NH start wanting Business Enterprise Tax? Seems like avoiding both state's taxes by having the company in MA with employees working in NH is too good to be true. :)

Dan Lanciani ddl@danlan.*com

Even for New York, I don't know if a consultant would be under the same rules. (If he would, it's certainly worth setting up his own corporation to work for so that his pay is earned in his home state.)

Seth

Is it taxable if I did not itemize my deductions? I had thought the only way it was taxable would be if I deducted the state tax on my

========================================= MODERATOR'S COMMENT: Since you did not receive any tax benefit, the refund is not taxable.

Good point, Seth, I don't think I've seen a case where NY applied that regulation to an independent contractor. I took "consultant" to mean the nature of the work he performed and not his status as an IC -- but indeed, he may not be an employee. In that case the letter of the NY regulation (NYCRR 132.18) would not apply to him; it is couched entirely in terms of employment.

Katie in San Diego.

It sounds as though the OP is now an employee of the Massachusetts company. Whether his working for it out of his home in NH, in and of itself, subjects the employer to the NH BPT / BET is indeed an interesting question, and an unsettled one so far. The presence of an employee or independent contractor performing services for the employer certainly is a physical presence for due process/commerce clause nexus purposes, and is not protected by P.L. 86-272 if the person's activities are not limited to solicitation of sales of tangible personal property. However, if the person's activities do not contribute to the employer's ability to establish and maintain a market in the state for the employer's products and services, the state may not consider them as creating nexus for the employer.

Of course we don't know that the employer isn't already subject to the BPT/BET because of other connections to New Hampshire.

Katie in San Diego

Some wags would say, "Live, Freeze, or Die."

On his New Hampshire state income tax return. Sorry I'm dense -- I don't understand what this sub-thread is about.

What you apparently don't understand is that NH doesn't have an income tax.