Most income is transferred from the federal return to the Massachusetts return automatically. However, because Massachusetts tax law differs from federal tax law in certain areas, additional information may be needed to properly calculate Massachusetts taxable income.
Program Entry
Massachusetts Return → Income Subject to Tax
The Following Information Can Be Added
Foreign Earned Compensation Not Reported on a W-2
Massachusetts residents are taxed on all income regardless of where it was earned. If you excluded foreign earned income on your federal return under IRC § 911, that income may still be taxable in Massachusetts and must be reported on the Massachusetts return.
Exempt Pensions and Annuities
Certain pensions are exempt from Massachusetts taxation. In general, exempt pensions include:
- Contributory pensions from the U.S. Government
- Contributory pensions from the Commonwealth of Massachusetts and its political subdivisions
- Noncontributory military pensions
Taxable pension income from the federal return is transferred automatically, but adjustments can be made if part or all of the pension qualifies for a Massachusetts exemption.
Schedule B
Interest and dividend income is transferred from the federal return. Additional information may be required if you are required to file Massachusetts Schedule B.
Schedule C
Massachusetts requires a business address for each Schedule C. If a business address was not entered on the federal Schedule C, enter the business address in this section.
Schedule D
Use this section to:
- Enter any Massachusetts capital loss carryover.
- Report differences between the capital gains and losses reportable for Massachusetts purposes and those reported on the federal return.
Schedule E
Use this section to report any differences between the federal Schedule E amounts and the amounts that are taxable for Massachusetts purposes.
Massachusetts Lottery Winnings
Report taxable Massachusetts Lottery winnings.
Note: You may only deduct the cost of the winning ticket. Deducting more than the cost of the winning ticket will cause the return to reject.
Other Gambling Winnings
Report gambling winnings that were not received from the Massachusetts Lottery.
If gambling winnings were reported on Form 1099-MISC, enter that amount in this section. The amount entered will be added to Other Gambling Winnings and removed from Other Income that was transferred automatically from the federal return.
Notes
- Massachusetts residents are generally taxed on all income regardless of where it is earned.
- Income transferred from the federal return may require adjustments when Massachusetts tax law differs from federal tax law.
- Additional schedules or supporting documentation may be required for certain income types.
- Review all entries carefully to ensure Massachusetts income is reported correctly.