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Tax Tips for U.S. Americans Abroad

Do U.S. Expats Need to File Massachusetts State Taxes?

Do U.S. expats need to file Massachusetts state taxes? Possibly. One thing for sure though, is that all U.S. Citizens and Greencard Holders are required to report their worldwide income to the IRS regardless of where they live and work (just see this post to learn more about that).

If you are no longer domiciled (meaning, you don’t consider yourself to have a permanent home in the states that you will return to if your job contract expires) read on. If you still are domiciled in Massachusetts, you will most likely need to file a state return every year!

Boston, Massachusetts

Here’s a simple guide that helps you determine whether you need to file Massachusetts state taxes:

Did you live in Massachusetts for any part of the year?

  • Yes: You will need to file as Part-Year Resident, skip down below
  • No: Continue on

Did you earn any Massachusetts sourced income during the year?

  • Yes: File as Non-Resident, skip down below
  • No: You don’t need to file

Everyone whose Massachusetts gross income is $8,000 or more must file a Massachusetts personal income tax return.

Even if you’re a nonresident but your annual Massachusetts gross income is more than either $8,000 or the prorated personal exemption (whichever is less) you must file a Massachusetts tax return.

Massachusetts Sourced Income

  • Money/income earned while you worked physically in Massachusetts State (i.e. any income including normal salary from your non-U.S. employer) while on a business trip to Massachusetts.
  • Or income earned from physical property located in Massachusetts (i.e. rental income from your old Massachusetts home).

Additional Massachusetts Income Sources:

Massachusetts Specific Filing Details

You must file if you are:

  • As a Resident of Massachusetts if your gross income was more than $8,000 — whether received from sources inside or outside of Massachusetts — you are required to file a Massachusetts income tax return. If your gross income was $8,000 or less, you do not need to file a return.
  • As a Part-Year Resident or Non-Resident: You’re generally taxed on all your income while you’re a resident of Massachusetts, received from sources inside or outside of Massachusetts.

Massachusetts gross income is income earned from all sources while you’re a Massachusetts resident.

Additionally, you must file a Massachusetts Nonresident/Part-Year Resident Income Tax Return, Massachusetts Form 1-NR/PY, if you were NOT: a resident of Massachusetts and you received Massachusetts source income in excess of your personal exemption multiplied by the ratio of your Massachusetts income to your total income. Or, you must file if you were not a resident of Massachusetts for the full year and your gross income was more than $8,000 — whether received from sources inside or outside of Massachusetts.

Expat Tax Benefits

Which expat tax benefits does Massachusetts State allow?

  • Moving Expenses: YES
  • Foreign Earned Income Exclusion: No
  • Foreign Tax Credit: Yes, limited to taxes paid to any territory or dependency of the U.S and the Dominion of Canada or any of its provinces.

A lot to process?

The information we shared on whether U.S. expats need to file Massachusetts state taxes is a lot. So don’t panic if you can understand it all! We at MyExpatTaxes can help you out with your state tax filings in an affordable way. Click here to sign up for our app, and get ready for a fun ride!

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