Bonus Taxed in 2 States

Forum|Forum|1 year ago
February 5, 2025
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My spouse and I both lived in MA for 10 months of 2023 before moving to NJ where we resided for all of 2024. My performance bonus was paid in Apr 2024 and had only NJ taxes withheld while my spouse had both NJ and MA taxes taken out. Neither of us switched employers. Do we need to report income to MA even though we didn’t work or live there in 2024? How does this work in turbo tax?

MAK70

Yes, you will need to report the Massachusetts income on a nonresident income tax return. The bonus is Massachusetts based income to the extent that it is derived from your employment in Massachusetts, so you can prorate it to 83% based on time- or any method that adequately represents the amount. You will also have to report the income to New Jersey, but TurboTax will walk you through the steps to determine the tax paid to another jurisdiction so that you are not taxed twice on the same income.