Looking for a Massachusetts Tax Forms And Templates? Download it for free!

2006 Form 1-NR/PY Instructions — Line by Line Instructions

◗ Massachusetts state court judges who were ap-

Part-year residents. Income from most private

Part-year residents. While a resident of Mass-

pensions or annuity plans is taxable in Massachu-

pointed on or after January 2, 1975 are partici-

achusetts, interest received from any savings

setts. You must report the taxable pension income

pants in the Massachusetts contributory retirement

banks, cooperative banks, national banks, trust

you received while a resident of Massachusetts.

system and their pensions are nontaxable. State

companies, savings and loan associations or

Certain government pensions, however, are ex-

court judges who were appointed prior to January

credit unions located in Massachusetts is taxable.

empt under Massachusetts law. In general, ex-

2, 1975 receive taxable noncontributory pensions.

Nonresidents/part-year residents, report in line 7a

empt pensions include contributory pensions

If you retired under Chapter 32, Sections 56

such interest taxable by Massachusetts.

from the U.S. government or the Commonwealth

through 60 of Massachusetts General Laws and

To report interest taxable to a nonresident/part-year

of Massachusetts and its political subdivisions,

are a veteran who began Massachusetts state

resident from banks located in Massachusetts,

and noncontributory military pensions. The fol-

service prior to July 1, 1939, all or part of your

enter in line 7a all amounts of interest received or

lowing section describes some specific pensions

pension income may be subject to tax. If you

credited to these deposit accounts (term and time

which are exempt. If your pension is not exempt,

elected to receive your proceeds from contribu-

deposits, including certificates of deposit, savings

you should generally enter in line 6 the taxable

tions in one lump-sum distribution, your original

accounts, savings shares, and NOW accounts).

amount reported on your U.S. Form 1040, line

contributions to the retirement system are not tax-

Combine all accounts at the same bank. Enclose a

16b or U.S. Form 1040A, line 12b. In some cases,

able. Noncontributory pension income received

statement listing names of all savings banks, coop-

however, Massachusetts law requires an adjust-

after a lump-sum distribution is fully taxable and

erative banks, national banks, trust companies,

ment to the federal amount. Distributions from

should be reported in line 6.

savings and loan associations or credit unions in

annuity, stock bonus, pension, profit-sharing or

which you have deposit accounts. In line 7b, enter

How do I report lump-sum distributions?

deferred payment plans or contracts described in

the exemption amount ($200 if married filing a

If you were an employee of the U. S., Massachu-

secs. 403(b) and 404 of the U.S. IRC must be ad-

joint return; otherwise enter $100) and subtract

setts or one of its political subdivisions and left

justed to account for your contributions that have

this amount from line 7a. Enter the result in line 7,

been previously taxed. Subtract from such income

public employment prior to retirement, you are not

but not less than “0.”

(as reported on your U.S. Form 1040, line 16a or

required to report as income the lump-sum distri-

U.S. Form 1040A, line 12a) the amount of your

bution of your previous pension contributions.

Note: This exemption amount does not apply to

contributions which were previously taxed by

your U.S. tax return.

Lump-sum distributions of qualified employee

Massachusetts until the total of your taxed contri-

benefit plans in excess of the employee’s contri-

Do not subtract interest forfeited or penalties

butions is received. If your pension falls into this

butions which were previously subject to Mass-

charged to you for early savings withdrawal. You

category, enter the adjusted amount in line 6 and

achusetts tax (or not previously excluded from

may be allowed to deduct these amounts on

explain briefly (in an enclosed statement) why this

Massachusetts tax) must be reported in line 6.

Schedule Y, line 2. All other interest, unless ex-

amount is different than the amount reported on

Generally, qualified rollovers are not taxable in

empt, should be entered on Massachusetts Sched-

your U.S. return. If you are receiving distributions

Massachusetts to the extent they are not taxable on

ule B. The return on an IRA/Keogh is not taxable

from an IRA or Keogh plan, do not report the in-

your U.S. return. Lump-sum distributions related

until distributed.

come here; instead, see to the instructions for

to IRA/Keogh distributions should be reported on

Lines 8, 9 and 12. If showing a loss in lines 8, 9

Schedule X, line 2.

or 12, be sure to mark over the “X” in the box to

What pensions are exempt?

Rollover from a Traditional IRA to a Roth IRA

the left. Do not use parentheses or negative signs

◗ Pension income received from a contributory

(Part-Year Residents Only). Taxpayers with

to indicate losses.

annuity, pension, endowment or retirement fund

$100,000 or less in federal adjusted gross income

Line 8. Business/Profession

of the U.S. government or the Commonwealth of

are allowed to make partial or complete rollovers

Massachusetts and its political subdivisions.

from existing IRAs to Roth IRAs. Any taxable por-

or Farm Income or Loss

tion of these rollovers included in federal gross in-

◗ Pensions from other states or its political sub-

Nonresidents engaged in a business or profession

come received while a resident of Massachusetts

in Massachusetts must complete a Massachu-

divisions which do not tax such income from

is also included in Massachusetts gross income,

setts Schedule C, Profit or Loss from a Business

Massachusetts or its political subdivisions may

except for amounts previously subject to Mass-

or Profession, and enter the amount of income or

be eligible to be deducted from Massachusetts

achusetts personal income tax. See Schedule X,

loss in line 8.

taxable income. This pension income, however,

line 2 instructions for further details.

should be reported in line 6. Refer to Schedule Y,

Part-year residents must report the income or

line 6 instructions to determine eligibility for this

Note: Massachusetts does not tax Social Security

loss from a business or profession received while

deduction.

income, therefore, you should not report such in-

a resident of Massachusetts, whether derived

come on Massachusetts Form 1-NR/PY.

◗ Noncontributory pension income or survivor-

from sources inside or outside of Massachusetts.

ship benefits received from the U.S. uniformed

Enter the amount of such income or loss that

Line 7. Interest from Massachusetts

services (Army, Navy, Marine Corps, Air Force,

would be reported on Massachusetts Schedule C,

Banks

Coast Guard, commissioned corps of the Public

line 31. You must enclose Massachusetts Sched-

Nonresidents. Interest income is only taxable if it

Health Service and National Oceanic and Atmos-

ule C with this return. Also, enclose a copy of

is related to a Massachusetts trade, business, pro-

pheric Administration) is exempt from taxation in

your U.S. Schedule C or Schedule C-EZ if substi-

fession, partnership or S corporation, or to the

Massachusetts.

tuting U.S. Schedule C or C-EZ for Massachusetts

ownership of real estate or tangible personal

Schedule C. Nonresidents, if your business or

property located in Massachusetts.

profession derived income from both inside and

outside Massachusetts, see the Nonresident Ap-

portionment Worksheet instructions in line 13.

Instructions For Form 1-Nr/py - Massachusetts Nonresident Or Part-Year Resident Income Tax - 2006 Page 12

Related Articles

Related forms

Related Categories