[kalyanks]

Hello,

I'm an F-1 PhD. Student studying full-time in a university in MA. I've been in the US for 6 years so I qualify as a Resident Alien for tax purposes.

During 2009, I was employed on campus in MA and interned during the summer in WA. Because WA has no state taxes, I did not pay any state taxes on my summer internship income. However, now it seems like I've to pay taxes on that income in MA because I qualify as a full-time MA resident.

In addition to this, the company I interned at, has declared my relocation expenses as taxable income. They did however pay the federal taxes on the relocation expenses so I don't have to worry about that. But because I didn't pay any state taxes, it seems like I have to pay MA state taxes on my income and the relocation expenses.

My question is:

1. Is it true that I have to file MA state taxes as a full-time resident and pay MA taxes on my WA income?

2. Will I have to pay the taxes on the entire income+relocation expenses (which have been reported together as wages on my W2)?

Thanks,
Kalyan

[ebaines]

Hello Kaylan. Because you were a full-year resident of MA, you do indeed have to report your out-of-state wages. So yes, you include your WA state income as well as the relo benefit to MA. Does your W2 have these amounts included in Box 16?

[kalyanks]

Thank you for your response ebaines. Boxes 15-20 on my W2 are blank -- presumably because the company I interned at had my WA address, and therefore did not charge me any state taxes.

[ebaines]

I see. In general if you file as a full year resident, MA expects that the wages you report to them will be the same as what you report as wages on your federal return.

[kalyanks]

Thanks for clearing that. Another question : because I was in WA only for the summer on an internship (i.e. I left MA in May and then returned to MA in Aug), I will not be able to file MA taxes as a part-time resident right?

[ebaines]

Thanks for clearing that. Another question : because I was in WA only for the summer on an internship (i.e. I left MA in May and then returned to MA in Aug), I will not be able to file MA taxes as a part-time resident right?

Right - since your intent was that your WA stay would be temporary, you never became a true WA resident.

[kalyanks]

Thanks for the help!

[AtlantaTaxExpert]

ebaines:

I know NY and NY city are adjusting how THEY treat international students (especially graduate students) for purposes of state residency, but, In my opinion, Kalyan can probably argue that he is NOT a Massachusetts resident due to his international student status.

That being the case, Massachusetts would then have NO legal standing to tax Kalyan's Washington-sourced income, because it was not earned within the borders of Massachusetts.

Kalyan:

If you have not yet filed, take note.

If you HAVE filed and paid Massachusetts txes on the Washington income, email me at [email protected] to discuss the optin of amending your Massachusetts return to get the paid taxes back.

[ebaines]

To clarify the issue of residency status for MA tax purposes, I found this on the Endicott college web site:
Endicott College - International Education International Students
Regarding F-1 students and residency status as defined by the state of MA:

Each state has its own tax code and if you earned money outside of Massachusetts, you will need to request tax return forms be sent to you from that state. Click here for links to state tax authorities.

To file tax returns in Massachusetts, you must first figure out whether you are considered a resident or a non-resident of the state. The definition of a non-resident for tax purposes in Massachusetts differs from the federal regulation.

You are considered a non-resident in Massachusetts if you lived on campus in a residence hall. You are considered a resident if you maintained an apartment AND resided in Massachusetts for more than 183 days.

If you are a non-resident of Massachusetts, you must file Massachusetts Non-Resident or Part-Year Resident Income Tax Form 1-NR-PY only if you earned income from a Massachusetts state source. Scholarships are included in Massachusetts income to the extent they are included in federal income and tax treaty benefits and may be claimed to the extent that they were claimed on federal forms.

If you are a resident of Massachusetts, you must report your income from all sources both inside and outside Massachusetts. Use Massachusetts Resident Income Tax Form 1.

So it all seems to depend on whether the OP lived in campus housing or not.

[AtlantaTaxExpert]

Each state seems to be refining the rules in attempts to get more tax money.

I am happy to note that Massachusetts does seem to honor tax treaties for the student.