Instructions For Form 1-Nr/py - Massachusetts Nonresident Or Part-Year Resident Income Tax - 2006 Page 11

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2006 Form 1-NR/PY Instructions — Line by Line Instructions
Legal Definition of Blindness
5.3% Income
the amount earned and received while you were
legally domiciled in another state or country.
You are legally blind and qualify for the blindness
exemption if your visual acuity with correction is
DOR and the IRS maintain an extensive exchange
◗ State or local employees contributing to pen-
20/200 or less in the better eye, or if your periph-
program, routinely sharing computer tapes and
sion plans. If you are a Massachusetts state, city,
eral field of vision has been contracted to a 10-de-
audit results. Discrepancies between income, de-
town or county employee and contributed to your
gree radius or less, regardless of visual acuity.
ductions, and schedules reported federally and on
pension plan, enter in line 5 the Form W-2 state
this return, except those allowed under state law,
wage amount. This amount will be greater than
Line 4e: Other: Medical and Dental
will be identified and may result in a state audit or
the U.S. amount because your pension contribu-
Expenses/Adoption Agency Fee
further investigation.
tions are excluded from your income for U.S. tax
You may claim an exemption for medical and den-
purposes. Contributions up to $2,000 may still be
Note: If filing as both a nonresident and part-year
tal expenses paid during 2006 only if you itemized
deducted in line 15a or 15b for Massachusetts tax
resident, you must complete Schedule R/NR, Res-
these expenses on your U.S. Form 1040, Sched-
purposes.
ident/Nonresident Worksheet, before proceeding.
ule A. If you are married filing a joint U.S. Form
1040, you must file a joint Massachusetts Form
Line 6. Taxable Pensions
Line 5. Wages, Salaries, Tips and
1-NR/PY to claim this exemption. Enter in line 4e,
and Annuities
Other Employee Compensation
item 1 the amount reported on your U.S. Form
Nonresidents. Under Title 4 of the United States
Report in line 5 total state wages from Form(s)
1040, Schedule A, line 4.
Code, section 114, payments to nonresidents
W-2. Enter the amount(s) stated as Massachu-
If you paid adoption fees to a licensed adoption
from certain qualified pension plans are not sub-
setts wages.
agency during 2006, you are eligible for an exemp-
ject to tax.
Note: Part-year residents, income earned while a
tion of the total amount of the fees paid during the
Qualified plans include: a qualified trust under IRC
Massachusetts resident in another state is subject
year. Fees paid during 2006 to an agency licensed
sec. 401(a) exempt from taxation under IRC sec.
to taxation in Massachusetts.
to place children for adoption on account of the
501(a); simplified IRC sec. 408(k) plans; IRC sec.
adoption process of a minor child regardless of
In most cases your total wages will be the same
403(a) annuity plans; IRC sec. 403(b) annuity
whether an adoption actually took place during
amount reported on your U.S. 1040 or 1040A,
contracts; IRC sec. 7701(a) (37) individual retire-
2006 should also be included for this exemption.
line 7; U.S. 1040EZ, line 1; U.S. 1040NR, line 8;
ment plans; eligible deferred compensation plans
Enter this amount in line 4e, item 2.
or U.S. 1040NR-EZ, line 3 unless:
of state and local governments and tax exempt
◗ you or your spouse earned income from em-
Enclose a statement showing the name and ad-
organizations as defined by IRC sec. 457; IRC
ployment outside Massachusetts (nonresidents
dress of the licensed adoption agency and the
sec. 414(d) government plans; a trust or trusts
only);
agency fees. Add item 1 and item 2 and enter the
described in IRC sec. 501(c) (18); and any plan,
◗ you were a Massachusetts legal resident work-
total in line 4e.
program or arrangement described in IRC sec.
ing in a foreign country (part-year residents only);
3121(v)(2)(C) or any plan, program, or arrange-
Line 4f: Total Exemptions
◗ you were a legal resident of Massachusetts for
ment that is in writing, that provides for retirement
Add lines 4a through 4e and enter the total in line
only a part of 2006; or
payments in recognition of prior service to be
4f. This amount should also be entered on line 22a
◗ you were a state or local employee and made
made to a retired partner, and that is in effect im-
of Form 1-NR/PY.
contributions to a Massachusetts state or local
mediately before retirement begins if payments are
pension plan.
Lines 5 through 11
made at least annually and spread over the actu-
◗ Income received by nonresidents is taxed only
Differences Between Wages for
arial life expectancy of the beneficiaries, or if pay-
ments are spread over at least a ten-year period.
Massachusetts Tax Purposes and
when it is from Massachusetts sources. Refer to
Such income is also protected from state taxation
the general instructions in this booklet for a defin-
Those Reported on Your U.S. Return
◗ Nonresidents earning a portion of income
if the plans are trusts under IRC sec. 401(a), but
ition of Massachusetts source income. The in-
exceed limits laid down in IRC secs. 401(k),
structions for each of these lines will describe
from employment outside Massachusetts. If a
401(m), 402(g), 403(b), 408(k) or 415 or any
Massachusetts source income in more detail. For
portion of the wage income reported on your U.S.
other limitation on contributions or benefits which
part-year residents, income received while a resi-
return was earned outside Massachusetts, the
may apply in the Code.
dent, whether from sources inside or outside of
amount in line 5 should not include wages earned
Massachusetts, is taxable.
in another state or country.
Retirement or retainer pay of a member or former
◗ Your entries must agree with the appropriate
member of a uniformed service computed under
◗ Massachusetts legal residents working in a
10 U.S.C. chapter 71 (military pensions) received
amounts on your copies of Forms W-2 and 1099,
foreign country while a Massachusetts resident.
by a nonresident is also exempt.
and/or required schedules for lines 8 and 9. Nonres-
Income earned in a foreign country is subject to
idents, if your actual Massachusetts income is not
taxation in Massachusetts. If you excluded part or
Any income from pensions related to a Massachu-
known, see the Nonresident Apportionment Work-
all of the compensation earned in a foreign coun-
setts trade, business or employment that is not
sheet in line 13 and accompanying instructions.
try on your U.S. return (under sec. 911 of the U.S.
derived from one of the qualified pension plans
IRC), you must include any such amount in line 5
listed above is taxable. Enter in line 6 the portion
Note: You cannot apportion Massachusetts wages
for Massachusetts tax purposes.
of those pensions reported on your U.S. Form
as shown on Form W-2.
◗ Part-year residents of Massachusetts. If you
1040, line 16a or U.S. Form 1040A, line 12a, that
are taxable to Massachusetts nonresidents.
earned only a portion of the income you reported
on your U.S. return while you were a Massachu-
setts legal resident, subtract from your U.S. wages

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