Instructions For Form 1 - Massachusetts Resident Income Tax

2006 Form 1 — Line by Line Instructions

other item that is not exempt. Generally, anyone

Line 35. Massachusetts Income

Generally, the first payment must be filed on or

who pays a sales or use tax to another state or

before April 15 of the taxable year. The estimated

Tax Withheld

territory of the United States on tangible personal

tax may be paid in full with the first payment or in

This represents all income taxes withheld for the

property to be used in Massachusetts is entitled to

four installments on or before April 15, June 15,

Commonwealth of Massachusetts as indicated on

a credit against the Massachusetts use tax, up to

September 15 of the current taxable year and Jan-

your copies of Forms W-2, W-2G, PWH-WA (pro-

5%. This credit is allowed for sales or use tax paid

uary 15 of the following year.

moter withholding), 2G, K-1 and certain 1099s, if

to another state only if that state has a correspond-

applicable. Enter the total of all Massachusetts

If you wish to verify estimated tax payments that

ing credit similar to the Massachusetts credit. See

withholdings in line 35. Attach, with a single staple,

have already been made, check the Estimated Tax

TIR 03-1 for more information. Prepare and retain

state copies to your return; otherwise your claim of

Payment History Application at

with your records a list of your purchases in 2006

amounts withheld will not be allowed. If you have

You will need to know the PIN that appeared on the

that are subject to the Massachusetts use tax.

lost your state copy, ask the payer for a duplicate.

back of your Form 1 booklet or the amount of last

Taxpayers may use the following table to self-re-

Copies of 1099s need only be attached if they

year’s refund or balance due to access your account.

port a “safe-harbor” amount of use tax based on

show an amount for Massachusetts tax withheld.

You may request your employer to withhold addi-

their Massachusetts adjusted gross income. A

tional amounts from your salary on Form M-4,

Line 36. 2005 Overpayment Applied

taxpayer may pay this amount in lieu of the actual

Massachusetts Employee’s Withholding Exemption

to Your 2006 Estimated Tax

amount of use tax that would otherwise be due with

Certificate to cover the taxes on other income so

respect to such purchases. Individual taxpayers

Include the exact amount of any 2005 overpay-

that you do not have to file and pay estimated taxes.

electing to report use tax under this method will

ment you applied to your 2006 estimated taxes on

If 80% of the tax is not paid throughout the year

not be assessed additional use tax on audit, even if

your 2005 Massachusetts Form 1, line 43 or Form

through withholding and/or estimated payments,

the actual amount of use tax due would have been

1-NR/PY, line 48. Do not include any 2005 refund

a penalty may be imposed.

greater than the amount from the schedule.

in this line.

The estimated liability applies only to purchases

Line 38. Earned Income Credit

Line 37. 2006 Massachusetts

of any individual items each having a total sales

The earned income credit is a tax credit for certain

Estimated Tax Payments

price of less than $1,000. For each taxable item

taxpayers who work and have earned income

If you paid Massachusetts estimated income tax

purchased at a sales price of $1,000 or greater,

under $38,348. Taxpayers who qualify for and

for 2006, enter in line 37 the total of all Massachu-

the actual use tax liability for each purchase must

claim the federal earned income credit are allowed

setts estimated tax payments. Be sure to include

be added to the amount of the estimated liability

a refundable credit equal to 15% of the federal

any last quarter (of 2006) payment made on or be-

derived from the table below. See TIR 04-26.

amount. If the credit due the taxpayer exceeds the

fore January 15, 2007. Do not include any 2005

amount of the total income tax payable for the year

Mass. AGI per return *

Use tax liability

overpayment applied to your 2006 estimated tax.

by the taxpayer, the excess amount of the credit

$25,010 – $025,000

$20

Every resident who expects to pay more than $400

$25,001 – $040,000

$15

will be refunded to the taxpayer without interest.

in Massachusetts income tax on income which is

$40,001 – $060,000

$25

You must enter the number of qualifying children,

not covered by Massachusetts withholding must

$60,001 – $080,000

$35

if any, in line 38a. Then, enter the federal earned

pay Massachusetts estimated taxes. Estimated tax

$80,001 – $100,000

$45

income credit amount from your U.S. Form 1040,

payments can be made online by using Web Serv-

Above $100,000

Multiply Mass. AGI * by .0005

line 66a, 1040A, line 40a; or 1040EZ, line 8a. Mul-

ices for Income by visiting or

tiply this amount by .15 (15%) and enter the re-

* From line 7 of Massachusetts AGI worksheet.

by filing Massachusetts Form 1-ES.

sult in line 38. Be sure to fill out Schedule DI,

Complete the following worksheet to calculate your

Income which is not subject to withholding includes:

Dependent Information, if you are claiming this

use tax if you are not self-reporting a “safe-harbor”

◗ salaries and wages where the employer is not

credit for one or more qualifying children/depen-

amount. For more information about use tax, visit

subject to Massachusetts withholding;

dents. Failure to do so will delay the processing of

DOR’s website at

◗ dividends and interest, including interest from

your return.

Massachusetts banks;

Form 1, Line 33 Worksheet —

If you choose to have the IRS compute your federal

◗ gains from capital assets;

Use Tax Due on Out-of-State Purchases

earned income credit, wait until the IRS notifies

◗ income from an individual trade, business, pro-

you of that amount before making an entry in line

1. Total of purchases in 2006 subject

fession, partnership or S corporation;

38. If you have not received your earned income

to Massachusetts use tax . . . . . . . .

◗ income from any estate or trust not taxed directly;

credit amount as computed by the IRS by April 17,

2. Use tax. Multiply line 1 by .05

◗ certain pensions;

2007, you may file Massachusetts Form M-4868,

(5%) . . . . . . . . . . . . . . . . . . . . . . . .

◗ taxable Keogh or IRA distributions;

Application for Automatic Six-Month Extension of

3. Credit for sales/use tax paid to other states or

◗ rental, royalty or REMIC income;

jurisdictions. Add the amount of any sales/use

Time to File Massachusetts Income Tax Return.

◗ unemployment compensation (from which no

tax paid to another state or jurisdiction, or 5%

See page 3 for information about filing your exten-

Massachusetts income tax was withheld);

of the sales price, whichever is less, on each

sion by telephone or via the Web. For more infor-

◗ alimony received;

purchase reported in line 1 . . . . . . .

mation about the federal earned income tax credit,

◗ contributions to SIMPLE accounts;

4. Total amount due. Subtract line 3 from line 2.

see IRS publication 596, available at

◗ illegal income; and

Not less than “0.” Enter the result here and on

◗ any other income received while a Massachu-

Form 1, line 33 . . . . . . . . . . . . . . . .

setts resident from which Massachusetts tax will

not be withheld.

Instructions For Form 1 - Massachusetts Resident Income Tax - 2006 Page 15

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