COVID-19 Information for Student Employees Working Outside of MA and in the US
Students who are or have been hired as Harvard employees are currently subject to Massachusetts income tax withholding. Per the University’s COVID-19 Interim Payrolling Guidance, MA state taxes will automatically be withheld for all employees temporarily working out of the state due to COVID-19 until 90 days after the Massachusetts COVID-19 state of emergency is no longer in effect. Whether or not you have to pay taxes in the state you are residing in during this period depends on that state’s tax guidelines.
Filing Massachusetts State Tax Returns
The Massachusetts Department of Revenue taxes residents on income from all sources, and non-residents only on income derived from Massachusetts. If you are a resident of Massachusetts, whether single or married, you will have to file a Massachusetts return if your gross income from all sources exceeds $8,000. If you are not a Massachusetts resident, filing will generally be required only if your “Massachusetts source income” exceeds either $8,000 or your Massachusetts prorated personal exemption, whichever is less. The 2020 exemption amount is $4,400 for single and $8,800 for married filing jointly.
Massachusetts Source Income
“Massachusetts source income” includes income derived from (i) a trade, business or employment carried on in Massachusetts, (ii) lottery or wagering transactions in Massachusetts, (iii) the ownership of an interest in real or tangible personal property in Massachusetts, and (iv) patents, copyrights or similar intangibles connected to Massachusetts. For most nonresident students, their Massachusetts source income will be limited to compensation from employment in Massachusetts. Interest or dividends received from Massachusetts banks or corporations will generally not be Massachusetts source income assuming that such items are not connected with a business activity of the student. Scholarship or fellowship grants not requiring the rendition of services should also not be deemed Massachusetts source income as no trade or business is involved.
Note: due to Massachusetts’ COVID-19 state of emergency for tax year 2020, all compensation paid to non-residents, who would generally perform such services in Massachusetts but for a Pandemic-Related Circumstance, will continue to be treated as Massachusetts source income subject to Massachusetts personal income tax.
You are a Full-Year Resident if your legal residence (domicile) is in Massachusetts or if you maintain a permanent place of abode in Massachusetts and during the year spend more than 183 days in Massachusetts.
You are a Nonresident if you were not a resident of Massachusetts but earned Massachusetts income (e.g., from a job in Massachusetts). You must report such income by filing a Massachusetts Nonresident/Part-Year Resident Income Tax Return, Form 1-NR/PY.
You are a Part-Year Resident if you either moved to Massachusetts during the tax year and became a resident, or terminated your status as a Massachusetts resident during the tax year and established a residence outside the state. Part-year residents must file a Massachusetts Nonresident/Part-Year Resident Income Tax Return, Form 1-NR/PY.
Legal residence or “domicile” in Massachusetts requires both a physical residence in Massachusetts and an intention to make Massachusetts one’s home permanently or for an indefinite period of time, with no intent to return to a prior home. If you are in Massachusetts solely to pursue a course of study over a relatively defined period of time, with an intention to return home at the conclusion of your studies, you will not be deemed to be domiciled in Massachusetts.
A “permanent place of abode” in Massachusetts means a dwelling place continually maintained by a person, whether or not owned by the person. Dwelling places maintained during a temporary stay not exceeding one year for a particular purpose are not deemed permanent places of abode. Dormitory rooms are also not deemed permanent places of abode; however, an off-campus apartment shared by students is considered a permanent place of abode.
Paying Massachusetts Estimated Taxes
Massachusetts will require the payment of estimated taxes if you expect to owe more than $400 in taxes on income not subject to withholding.
Massachusetts Tax Filing Deadline
May 17, 2021