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

Note: You may substitute U.S. Schedule C or C-EZ

voluntary withholding of Massachusetts state in-

Who Cannot Apportion Income?

for Massachusetts Schedule C if there are no dif-

come taxes on your unemployment compensa-

If you know the actual amount of your Massachu-

ferences between the amounts reported on U.S.

tion, be sure to include the amount of Massachu-

setts source income, do not apportion. Report

Schedule C or C-EZ and amounts that would be

setts state income tax withheld as reported on

your income taxable in Massachusetts on your

reported on Massachusetts Schedule C. Be sure

Form 1099-G on Form 1-NR/PY, line 40 and at-

Massachusetts return. Examples of nonresidents

to write “No Massachusetts Differences” on the

tach with a single staple, where indicated on the

who cannot apportion include:

top of the U.S. Schedule C or C-EZ.

return, Form 1099-G.

◗ an employee whose actual Massachusetts in-

come is shown on Form W-2;

If you operate a farm as an individual or coopera-

Note: DOR routinely matches the amounts in line

◗ an employee whose Form W-2 does not indicate

tive, enter the amount of income or loss from op-

10a with files from the Division of Unemployment

initially his/her actual Massachusetts income but

erating a farm from U.S. Schedule F, Profit or Loss

Assistance.

whose employer issues a corrected Form W-2 or

from Farming, line 36. Enclose a copy of U.S.

Line 10b. Massachusetts State

other statement which breaks down this amount.

Schedule F. Complete a pro-forma U.S. Schedule F

Lottery Winnings

Since your employer is required by law to withhold

to report Massachusetts differences, such as bo-

Massachusetts tax on your Massachusetts wages,

nus depreciation.

Enter in line 10b all winnings from the Massachu-

this breakdown will be easy to obtain; and

setts state lottery. Do not enter less than “0.” You

◗ a self-employed person whose actual Mass-

Line 9. Rental, Royalty, REMIC,

may only deduct the price of your winning ticket.

Partnership, S Corporation,

achusetts income is known, such as a surgeon

Lottery losses claimed as itemized deductions on

who comes to Massachusetts to perform a spe-

Trust Income or Loss

U.S. Form 1040, Schedule A are not allowed on

cific operation for a set fee.

your Massachusetts return.

Nonresidents. Report the amount of Massachu-

In the few cases when your employer fails to issue

setts source income or loss from the items listed

Note: DOR routinely matches the amounts in line

a separate Form W-2 that includes only Massachu-

above.

10b with files from the Lottery Commission.

setts earnings, you may use the Nonresident Ap-

Part-year residents. Report the amount of in-

Add lines 10a and 10b and enter the total in line 10.

portionment Worksheet to adjust your earnings.

come or loss from the items listed, received while

Line 11. Other Income

a resident of Massachusetts, whether derived from

Who Must Use the Nonresident

sources inside or outside of Massachusetts.

(from Schedule X)

Apportionment Worksheet?

Enter in line 9 the total of: Massachusetts Schedule

Alimony Received, Taxable IRA/Keogh

If your employment or business took you both in-

E, Part I, line 5; Part II, line 8; and Part III, line 11.

and Roth IRA Distributions, Other

side and outside Massachusetts and you do not

Remember to subtract losses when calculating the

Gambling Winnings, Fees and Other

know the actual amount of income you earned in

total. You must enclose Massachusetts Schedule

5.3% Income

Massachusetts, you must use the Nonresident Ap-

E and a copy of U.S. Schedule E. Explain on an en-

“Other 5.3% income” includes the items listed

portionment Worksheet if you are a self-employed

closed sheet any differences in amounts entered

above and must be included on Schedule X. Enter

person or employee who is on an hourly, daily,

on the Massachusetts and U.S. schedules. See

the total from Schedule X, line 5. Not less than

weekly, monthly or mileage basis, or whose com-

Massachusetts Schedule E instructions for an ex-

“0.” Be sure to enclose Schedule X with your re-

pensation depends upon sales, at least some of

planation of possible differences.

turn. Enclose an additional statement if more space

which take place outside of Massachusetts.

is needed. Failure to enclose this schedule will

Note: If both you and your spouse both qualify to

Line 10a. Unemployment

delay the processing of your return. See Schedule

apportion your income or you have more than

Compensation

X instructions.

one job that is eligible for apportionment, you must

Nonresidents. Enter the portion of your unemploy-

complete a separate apportionment worksheet for

Line 12. Total 5.3% Income

ment compensation reported on U.S. Form 1040,

the income that is eligible to be apportioned.

line 19; U.S. Form 1040A, line 13; U.S. Form

Add lines 5 through 11 and enter the total in line

1040EZ, line 3; or U.S. Form 1040NR, line 20, re-

12. Remember to subtract any losses marked

Who Can Apportion Income But

lated to previous Massachusetts employment.

with an “X” when calculating the total.

Cannot Use the Nonresident

Only unemployment compensation related to pre-

Apportionment Worksheet?

vious Massachusetts employment is taxable to

Apportionment —

If you do not know the actual amount of income

nonresidents. If you elected voluntary withhold-

you earned in Massachusetts from one business

ing of Massachusetts state income taxes on your

Nonresidents Only

or employment, but you do not fit into any of the

unemployment compensation, be sure to include

categories listed in the preceding section, you

the amount of Massachusetts state income tax

Sometimes your business or employment re-

should not use the Nonresident Apportionment

withheld as reported on Form 1099-G on Form

quires you to work both inside and outside Mass-

Worksheet. See the section on “Special Apportion-

1-NR/PY, line 40 and attach with a single staple,

achusetts, but you do not know the actual amount

ment Methods” for your apportionment method.

where indicated on the return, Form 1099-G.

of income you earned from working in Massachu-

Examples of nonresidents who must apportion in-

Part-year residents. Enter in line 10a the amount

setts. In this case, you must apportion your in-

come using one of these special methods include:

of unemployment compensation reported on U.S.

come so that only the correct portion (the amount

◗ an independent business or professional person

Form 1040, line 19; U.S. Form 1040A, line 13;

attributable to Massachusetts) will be taxed by

whose income does not depend on sales, days or

U.S. Form 1040EZ, line 3; or U.S. Form 1040NR,

Massachusetts. Some nonresidents must use the

mileage;

line 20, received while you were a resident of

Nonresident Apportionment Worksheet in line 13

Massachusetts, whether related to employment

for this purpose.

inside or outside of Massachusetts. If you elected

Instructions For Form 1-Nr/py - Massachusetts Nonresident Or Part-Year Resident Income Tax - 2006 Page 13

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