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Massachusetts Nonresident Apportionment Methods

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Massachusetts Nonresident Apportionment Methods

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Apportionment Methods

  1. Employees Compensated on an Hourly, Daily, Weekly or Monthly Basis:
    f
    raction, the numerator of which is the number of days spent working in Massachusetts and the denominator of which is the total working days. Total working days does not include weekends, holidays, sick days, vacations, and paid or unpaid leave.
  2. Employees Compensated on an Hourly, Daily, Weekly or Monthly Basis:
    f
    raction, the numerator of which is the number of days spent working in Massachusetts and the denominator of which is the total working days. Total working days does not include weekends, holidays, sick days, vacations, and paid or unpaid leave.
  3. Salesperson:
    fraction, the numerator of which is the amount of sales made within Massachusetts and the denominator of which is the amount of sales made everywhere.Self-employed Nonresidents Carrying on a Trade or Business in Massachusetts and Elsewhere:
    If the books of the self-employed nonresident clearly show the amount of Massachusetts source income, the return must reflect the gross income of the trade or business, wherever derived, the amount apportioned to Massachusetts and the basis used. Otherwise, the self-employed nonresident must use one of the three apportionment methods listed above.
  4. Nonresident Entertainers:
    The Massachusetts source income of a nonresident entertainer is generally the entire amount received for a performance or an engagement performed in Massachusetts. A nonresident entertainer who is not paid specifically for a performance in Massachusetts can apportion by multiplying the total annual compensation by a fraction, the numerator of which is number of performances in Massachusetts and the denominator of which is the total number of performances that the entertainer was obligated to perform under contract.
  5. Entertainer, an individual employee, partner or sole proprietor who receives compensation to perform, entertain, amuse, or inform (as, for example, a lecturer) at one or more discrete events. 
  6. Nonresident professional team athletes who perform services in Massachusetts must apportion income. The general rules are as follows:
  7. Duty Day Apportionment Method:
    The taxation of nonresident professional team athletes is governed by regulation 830 CMR 62.5A.2 which is based on a "duty day" apportionment method. Duty days include all days from the initial pre-season training day through the last day of competition, e.g., game days, practice days, days spent at team meetings and promotional "caravans and training" camps. Massachusetts source income is determined by multiplying the person's total compensation for performing such personal services by a fraction, the numerator of which is the number of duty days in Massachusetts and the denominator of which is the total number of duty days everywhere.
  8. Total compensation for services of a nonresident professional team athlete includes salaries, wages, performance bonuses, and pay for championship, playoff or bowl games or for selection to all-star play. However, the original signing bonus received by a nonresident athlete is excluded from total compensation if all of the following conditions are met:
      1. it is not conditional upon the signee performing services (such as making the team or playing any games);
      2. it is payable separately from salary and other compensation; and
      3. it is nonrefundable.

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Views: 444 Created on: Jun 15, 2013
Date updated: Sep 18, 2015
Posted in: STATES, Massachusetts

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