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Posted by Jim Armstrong on November 29, 2007, 3:56 pm
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Hello all,
I've been reading up on the state tax procedures for non-resident
telecommuters, and figured I'd post our situation here and get some
guidance.
My girlfriend was a Massachusetts resident working for a Massachusetts
company. In September 2007 we moved to Connecticut and became CT
residents. She still works for the MA company, working 100% from her
CT home office except for the rare MA office visit when she is in town
to see her parents or whatever.
Her paychecks have been updated to reflect the new CT address, but MA
state tax (and no CT state tax) is still being withheld as it was when
she was a resident.
Now, we are trying to decide what the withholding should be to avoid
(or minimize) a nightmare come tax time. The way I see it, she is
earning her money while physically in CT, which means CT has a claim
on earnings. What about MA? Since it is a MA company, does MA have any
claim to earnings?
Does anyone with CT/MA tax clients/experience know the best way to
setup withholding and file returns? The company she works for is very
small and I'm pretty sure they do not have a CT tax ID. I'm assuming
they cannot withhold taxes for CT. (They do their payroll through ADP
- perhaps that would help? Not sure how that works...) Should she set
her MA withholding to zero and pay CT estimated tax? Leave it set to
MA withholding and file a return to get a credit?
I assume she will have to file in both states (definitely this year
since she was a part-year MA resident, but next year as well, when she
is 100% CT res?) but not sure what to do at this point. I plan to have
a professional help us file next year, but want to do anything we can
now to both understand the law and make it as easy as possible come
April.
Thanks in advance for any help!
-J
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