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

Credit (LIH) or Historic Rehabilitation Credit (HR)

Line 32. Limited Income Credit —

Schedule B, Line 36 and Schedule D, Line 19

property is disposed of or ceases to be in quali-

Single, Married Filing a Joint

Worksheet — Exemptions from Interest and

fied use prior to the end of its useful life, the dif-

Return or Head of Household Only

Dividend Income, 12% Income and Long-Term

ference between the credit taken and the total

Capital Gain Income and Excess Home Heating

If you do not qualify for No Tax Status, but you are

credit allowed for actual use must be added back

Fuel Deduction (Only if Single, Head of House-

single and your Massachusetts AGI is between

to your tax on Form 1-NR/PY. Complete and en-

hold, or Married Filing Jointly)

$8,000 and $14,000, or if you are filing as head of

close Schedule H-2, Credit Recapture. Schedule

household and your Massachusetts AGI is be-

If your total exemptions in line 22 are more than

H-2 is available at or by call-

tween $13,550 and $23,713 plus $1,750 per de-

the amount of your 5.3% income after deduc-

ing (617) 887-MDOR or toll-free in Massachusetts

tions in line 21 or your home heating fuel de-

pendent, or if you are married filing a joint return

1-800-392-6089.

duction from Schedule Y, line 14 is more than

and your Massachusetts AGI is between $15,300

the amount of 5.3% income after deductions

and $26,775 plus $1,750 per dependent, you may

Massachusetts AGI

from Schedule Y, Line 14 Worksheet, line 3, the

qualify for the Limited Income Credit. This credit

excess may be applied against all your interest

is an alternative tax calculation that can result in a

No Tax Status — Single, Married Filing

and dividend income and income taxed at 12%.

significant tax reduction for people whose income

Any remaining excess amount may then be

a Joint Return or Head of Household Only

is close to the No Tax Status threshold. Be sure to

applied against all your long-term capital gain

If your Massachusetts Adjusted Gross Income

complete Schedule NTS-L-NR/PY on the back of

income. Complete the following worksheet only

(Massachusetts AGI) was $8,000 or less if single,

page 3 of Form 1-NR/PY to see if you may qualify

if line 21 is less than line 22 to determine if you

$13,550 or less plus $1,000 per dependent if head

for this credit.

qualify for the excess exemption and the Sched-

of household, or $15,300 or less plus $1,000 per

ule Y, Line 14 Worksheet on page 25 to deter-

Line 33. Other Credits

dependent if married filing a joint return, you qual-

mine if you qualify for the excess deduction.

ify for No Tax Status and are not required to pay

(from Schedule Z, Part I)

Enter all losses as “0.”

any Massachusetts income taxes.

Lead Paint Credit, Economic Opportunity

1. Enter amount from Schedule B, line 35.

To see if you may qualify for No Tax Status, com-

Area Credit, Full Employment Credit,

Not less than “0” . . . . . . . . . . . . . . .

plete Schedule NTS-L-NR/PY found on the back

Septic Credit, Brownfields Credit,

2. Enter amount from Form 1-NR/PY,

of page 3 of Form 1-NR/PY. See Schedule

Low-Income Housing Credit, Historic

line 22 . . . . . . . . . . . . . . . . . . . . . . .

NTS-L-NR/PY instructions.

Rehabilitation Credit, Home Energy

3. Enter the amount from line 15 of the

Efficiency Credit, Film Incentive Credit

Schedule Y, line 14 worksheet. . . . .

Massachusetts Adjusted Gross Income for

4. Add lines 2 and 3. . . . . . . . . . . . .

and Medical Device Credit

No Tax Status and Limited Income Credit

5. Enter amount from Form 1-NR/PY,

“Other credits” include the items listed above and

Massachusetts Adjusted Gross Income (Mass-

line 21 . . . . . . . . . . . . . . . . . . . . . . .

must be included on Schedule Z, Part I. Nonresi-

achusetts AGI) is not the same as taxable income.

6. Subtract line 5 from line 4. If “0” or less,

dents and part-year residents, enter the total from

Massachusetts AGI includes:

you do not qualify for this exemption.

Schedule Z, line 11 on Form 1-NR/PY, line 33. Be

◗ wages, salaries, tips;

Omit remainder of worksheet . . . . .

sure to enclose Schedule Z with your return. Failure

◗ taxable pensions and annuities;

7. Excess exemptions applied against interest

to do so will delay the processing of your return.

◗ pension income from another state or political

and dividend income and 12% income. If line 1

is larger than line 6, enter line 6 here and in

subdivision before any deduction;

Line 34. Credits for Part-Year Resi-

Schedule B, line 36. If line 6 is equal to or

◗ taxable IRA/Keogh and Roth IRA distributions;

dents Only

(from Schedule Z, Part II)

larger than line 1, enter line 1 here and in

◗ fees and unemployment compensation;

Credit for Income Tax Paid to Another

Schedule B, line 36. Complete lines 8

◗ income or loss from a business or profession;

through 10. . . . . . . . . . . . . . . . . . . .

State or Jurisdiction and Solar Wind

◗ income or loss from partnerships, S corpora-

8. Subtract line 7 from line 6. If “0,” omit

and Energy Credit

tions and trusts;

remainder of worksheet . . . . . . . . .

“Credits for part-year residents only” include the

◗ rents, royalties and REMIC income;

9. Enter Schedule D, line 18. Not less

◗ alimony and other 5.3% income;

items listed above and must be included on

than “0” . . . . . . . . . . . . . . . . . . . . . .

◗ interest from Massachusetts banks before ex-

Schedule Z, Part 2. Part-year residents, enter the

10. Excess exemptions applied against long-

total from Schedule Z, line 14 on Form 1-NR/PY,

emptions; and

term capital gain income. If line 9 is larger

◗ other interest, dividends, and capital gains.

line 34. Be sure to enclose Schedule Z with your

than line 8, enter line 8 here and in Schedule D,

return. Failure to do so will delay the processing

line 19. If line 8 is equal to or larger than line 9,

Line 30. No Tax Status

of your return.

enter line 9 here and in Schedule D,

If you qualify for No Tax Status, fill in the oval in

line 19 . . . . . . . . . . . . . . . . . . . . . . .

Line 37. Voluntary Contributions

line 30, enter “0” in line 31 and omit lines 32

You may contribute any amount to the following

through 35. Also, enter “0” in line 36 and complete

Excess Exemptions

funds. Remember, these amounts are added to

Form 1-NR/PY. However, if there is an amount en-

If excess exemptions were used in calculating

your tax. They increase the amount of your pay-

tered in line 29, Credit Recapture Amount, enter

lines 24, 27 or 28 (see Schedule B, line 36 and/or

ment or reduce the amount of your refund.

that amount in line 31 and complete lines 33

Schedule D, line 19), be sure to fill in the oval in

through 35.

a. Endangered Wildlife Conservation: The Natural

line 28.

Heritage and Endangered Species Fund is admin-

Note: If married filing separately you do not qual-

Line 29. Credit Recapture Amount

istered by the Division of Fisheries and Wildlife.

ify for No Tax Status or the Limited Income Credit.

Contributions are used to protect and restore rare

If any Brownfields Credit (BC), Economic Oppor-

tunity Area Credit (EOA) or Low-Income Housing

Instructions For Form 1-Nr/py - Massachusetts Nonresident Or Part-Year Resident Income Tax - 2006 Page 17

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