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How to file the capital gain/loss difference and short-term capital loss in Massachusetts?

Forum|Forum|4 years ago
March 26, 2022
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Hi all,

My wife has a 1099-NEC from Massachusetts so we need to file a state tax for MA, and it just makes all the things really complicated.

Neither my wife nor I has stepped on Massachusetts ever in 2021, so we think the amount on 1099-NEC is the only thing we need to report to the state of MA, and the amount on 1099-NEC is around $1600.

Now, assume that we have a federal gain/loss of $30000. Does that mean for the capital gain/loss difference, we need to enter a -30000 as no gain/loss is related to MA?

And also assume we get a short-term capital loss of -$15000(I don't know why Turbotax uses a negative number for our capital loss, but it's just how it works and I assume it means that we lost $15000 in the short term), since our investment has nothing to do with MA, do I need to enter a 15000 as the loss amount reportable to MA is 0?

And after we have done these, Turbotax told us that we owe the state of MA around $370. Just wondering whether this amount is reasonable.

Thank you very much and any help is appreciated!

Best answer by JohnB5677

I'd like to know what the 1099-NEC was for. Owning property or assets would possibly be an issue, but a 1099-NEC is Non-Employee Compensation and it is for physical tasks being performed as wages.

If you and your wife never set foot in Massachusetts, you do not have to file a Massachusetts tax return, and you owe no tax money to that state. The entire 1099-NEC will be taxed in your home state, at your home state's tax rate.

Furthermore, nothing other than that specific 1099-NEC can be considered by Massachusetts as an income source. So all of those other complications can go away.

JohnB5677Answer

I'd like to know what the 1099-NEC was for. Owning property or assets would possibly be an issue, but a 1099-NEC is Non-Employee Compensation and it is for physical tasks being performed as wages.

If you and your wife never set foot in Massachusetts, you do not have to file a Massachusetts tax return, and you owe no tax money to that state. The entire 1099-NEC will be taxed in your home state, at your home state's tax rate.

Furthermore, nothing other than that specific 1099-NEC can be considered by Massachusetts as an income source. So all of those other complications can go away.

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Y

yixinwu921203Author

That 1099-NEC is more like a very short term employment from a company. That company is about helping students to go to colleges and my wife helped them to review the essays from those students, and my wife only helped for 2 months.

However, that company didn't employ my wife as an employee for some reason, so they had to give a 1099-NEC to her.

So does that mean I don't need to file a tax return to MA?

AmyC

Employee

Correct. Because the 1099-NEC is below the required threshold for filing, MA is not required. See filing requirements here on page 3 for non-residents.

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