MA Part Year

[Terry D EA]

New client left MA July of 2016 and moved to NC. Two part year returns are due. Client has stated that Teachers' retirement is not taxable to MA. I need some clarification on this as well as to make the proper entries in Drake. Also, client stated that $200.00 of interest income earned from a bank in MA is exempt from MA taxes. Clarification and references please.

[FDNY]

The pension if from the MA Teachers Retirement System is exempt from MA taxes.  There's a worksheet for pensions on MA1 where you can indicate that.  The interest can be indicated on the 1099 INT where there is a drop down box under the interest input to indicate MA source.

[Catherine]

FDNY has it right but I'll chime in as well.

State pensions are taxed when earned - so in the working years, the state income if higher than the federal income on that W-2.  And there is *always* a Mass warning that the "state income is higher, please check your entries" - so annoying.

On the interest entry screen in Drake, there is a box at  the bottom called state-specific information.  Pick MA from the drop-down and enter the full state interest.  $100 is exempt per filer per year - $100 for a single person, $200 for a couple.  ONLY for banks chartered in Massachusetts.  So not Bank of America, not Citizens, not Santander, but yes Salem Five or Middlesex Savings or any of a zillion other small banks and credit unions.

[Terry D EA]

Thanks guys, the bank in mention is Canton something. I'll be sure to check the form entries real close. Catherine I may ask you some other questions if needed. Thanks again.

[Catherine]

13 hours ago, Terry D said:

Catherine I may ask you some other questions if needed. Thanks again.

Any time!  You know where to find me.

[FDNY]

2 hours ago, Catherine said:

Any time!  You know where to find me.

You're my MA Go To person too!  Don't forget, I'm a Red Sox fan now.