Mass. Agency Says Teleworkers Must Source Income To State

Employees who worked in Massachusetts prior to the COVID-19 pandemic but subsequently telecommuted from out of state must continue sourcing their income to Massachusetts for tax purposes, the state Department of Revenue said in personal income tax guidance.

In a working draft of a directive issued Thursday, the department said nonresidents who used to apportion their income to the state must continue to do so. Employees who telecommuted from outside Massachusetts prior to the COVID-19 state of emergency are eligible for Massachusetts credits for other state taxes paid, the department explained.

The department also said that days spent in Massachusetts in 2020 due to pandemic circumstances by individuals who have a permanent abode in the state count toward the 183-day threshold for establishing residency in the state.

The guidance is based on rulemaking that imposes income tax on remote workers during the COVID-19 pandemic,. The rule has prompted a lawsuit brought by New Hampshire against Massachusetts in the U.S. Supreme Court, arguing that the rule is unconstitutional. 

The public comment period for the draft guidance closes March 5.  

--Editing by Vincent Sherry. 

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