"Rich Carreiro" <rlcarr[at]animato.arlington.ma.us> wrote:

- quote -

This is not really any different than the way New York has
done this for many years. The severance is deemed by the
State (and City back in the day of non-resident taxes) to be
fully allocable to NY. It could be allocated based on an
average of three or five years most recent returns without
question.

Andrew Goldstein

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See:
http://www.dor.state.ma.us/rul_reg/dir/DD_03_12.htm

Main effect seems to be that (for example) if you quit your
job on 31 December 2002 and actually receive your severance
check in January 2003, all of that income will be taxable by
MA, whereas before the change courts had ruled that MA was
unable to tax the income because the person did not work at
all in MA in the year the income was received.

What is not clear to this layman's eyes is whether or not
the new statute and rules blow away the ability to exclude
some of your salary from MA tax by apportionment. For
example, under the old rules, if you were a MA non-resident
employed in MA, but worked N days outside of MA (did field
work, spent time at a non-MA office of his employer, etc.),
he could exclude the fraction N/(number of working days) of
his salary from MA tax (that very example is given in the
old regulation). Does the new statute preclude this? Would
100% of the salary of such a person now be taxable by MA
under the new law?

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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