Hello and thank you for your question.
Let's start with Massachusetts:
Form 1-NR/PY
http://www.massdor.com/forms/inctax03/nrpdfs/nrpy_inst.pdf
Since both you and your wife became Massachusetts residents during the
year, the treatment is the same for each of you on the Massachusetts
return. However, because you periods of residency were different, you
cannot file jointly for Massachusetts--you must file as 'married
filing separately.' See page 9, bottom of first column.
As you'll see on page 4, item 3, each of you is a part-year resident
because you are now (see page 7 'domicile') Massachusetts residents,
but you moved to Massachusetts during the year.
Line 5 of the return (described on page 10, middle column) is where
you will report your income from wages earned after moving to
Massachusetts (5.3% income). Also see page 12, middle column,
bottom--"If you know the exact amount of your massachusetts income, do
not apportion."
Your taxable interest and dividends (like your deductions and
exemptions) do get apportioned--according to the number of days you
were resident. And each return will have a different calculation on
line 2, because the number of Massachusetts days is different for each
of you.
Now New York:
Nonresident and Part-Year Resident Income Tax Return
http://www.tax.state.ny.us/pdf/2003/inc/it203i_2003.pdf
See page 2 (center of the page) for a good summary of the
rules--you'll see that you compute a base tax as if the whole year's
income was earned in New York, and then you prorate all the figures by
the number of days you were a New York resident.
See page 5-6 (these are the Adobe Acrobat pages--not the pages printed
on the form itself) for further details. Oddly (page 8 first column)
New York will require you to file a joint state return. And you'll
need to complete the income allocation form on (their page 17) to
produce the base income and the apportionment.
Despite all of New York's talk of apportioning your income, the wages
you earned as part-year residents follow the same rule as
Massachusetts--except New York is careful to note that it's accrued
wages--so New York paychecks that came to you after you moved out are
still subject to New York tax (see adobe page 7). Note the right
column on the same page, which makes each of you part-year residents
even though you spend a small part of the year working in New York.
I'm going to stop here and suggest that you take a shot at filling out
the New York and Massachusetts returns. The forms are at
http://www.tax.state.ny.us/Forms/income_partyear_forms.htm
and
http://www.massdor.com/forms/inctax03/inctax03.htm#1_nrpy
[This might also be a good year for you to buy the Taxcut or Turbotax
programs, including the 2 states' programs, since they will take you
through the process step-by-step).
If in filling in the returns you find any of the above unclear, please
request clarification. I would appreciate it if you would hold off on
rating this answer until I have a chance to reply.
Search terms used
massachusetts income tax year joint
massachusetts NR/PY
new york income tax part-year
Thanks again for bringing us your question. And welcome to Massachusetts!
Sincerely,
Richard-ga |
Clarification of Answer by
richard-ga
on
20 Jan 2004 06:46 PST
Hello again:
1. Yes, you can file jointly for federal purposes regardless of how
you are filing in each state. But having filed jointly for federal
purposes, New York will require that you file jointly in New York in
this case (page 8 of the instructions cited in my answer, center
column--it's the same paragraph that I'm quoting from in paragraph 2
below).
2. Sorry I wasn't clear about that. The fact that you have no New
York income makes the filing easier, even though it is still a New
York joint return. Whether you consider yourself to have ceased being
a New York resident on January 1 or some date in February, the result
is the same except for the mechanics of who signs the return.
from page 8, column 1:
"If you filed a joint federal return and ... both spouses are
part-year residents [i.e. you were a New York resident for the first
month of the year], you must file a joint New York State return using
filing status '2'. Both spouses must sign the return .... Do not
complete or attach Form IT-203--C to your return."
from page 8, column 2:
"If you filed a joint federal return and ... one spouse is a part year
resident and the other is a nonresident with no New York source income
[i.e. you ceased being a New York resident on January 1], you must
file a joint New York State return using filing status '2' and include
in the Federal amount column the joint income as reported on your
federal income tax return. However, only the ... part-year resident
spouse should sign Form IT-203 [and] that spouse must also complete
Form IT-203-C."
3. The income you earned on joint accounts will appear on both state
returns, but because of the proration it won't be doubly taxed. The
New York instructions don't talk about joint income specifically, but
if you'll look at Form IT-203 you'll see that because the calculation
starts with your federal income there's no way to exclude it. Because
each state has you compute a fraction to allocate the income, the
result is not unreasonable (New York's fraction plus Massachusett's
fraction may not add up exactly to 1.0 because of the way they count
days but it will be close).
I hope this helps!
Richard-ga
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