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2006 Form 1-NR/PY Instructions — Schedule Instructions

◗ When using this schedule to calculate credit

ceived as an Individual Retirement Account (IRA),

Note: You must complete separate worksheets if

for interest income (other than interest from

Keogh or Roth IRA conversion distribution while a

married filing a joint return and both you and your

Massachusetts banks), dividends or capital gain

resident of Massachusetts, whether derived from

spouse received IRA/Keogh Plan and/or Roth IRA

income, enter in line 1 such income taxed in an-

sources inside or outside of Massachusetts. Since

conversion distributions.

other jurisdiction calculated as if it was earned in

Massachusetts does not allow a deduction for

Line 3. Other Gambling Winnings

Massachusetts.

amounts originally contributed to an IRA or Keogh,

Enter in Schedule X, line 3 all gambling winnings

the distributions are not taxable until the full amount

◗ If you choose to pay the optional 5.85% tax rate,

from casinos, raffles, races, beano or other events

of your contributions which were previously sub-

substitute .0585 for .053 in line 4 of the schedule.

of chance held in Massachusetts (part-year resi-

ject to Massachusetts taxes are recovered.

dents, whether held inside or outside of Mass-

Line 1. Total 5.3% Income Taxed

◗ Contributions made to Keogh accounts prior to

achusetts). Do not enter less than “0.” You may

by Other Jurisdictions

1975 were deductible when made. Therefore, no

only deduct the price of the winning ticket. Gam-

deduction may be taken from a Keogh distribution

Enter the total 5.3% income on which you paid

bling losses are not deductible under Massachu-

for amounts contributed before 1975.

taxes to another jurisdiction.

setts law. Gambling losses claimed as itemized de-

Massachusetts generally adopts the federal con-

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

Line 4. Massachusetts Tax on

version rules for partial or complete rollovers from

allowed on your Massachusetts return.

5.3% Income

existing IRAs to Roth IRAs. Generally, the rollover

Note: Do not report Massachusetts state lottery

Multiply Form 1-NR/PY, line 23 by .053, less any

amount is treated as a distribution and included in

winnings in Schedule X, line 3. Instead, report

Limited Income Credit from Form 1-NR/PY, line 32.

federal gross income to the extent it is attributable

them on Form 1-NR/PY, line 10b.

to investment growth or previously deducted con-

Line 6. Income Tax Paid to Other

tributions. See TIR 98-8, Massachusetts 1998 Re-

Line 4. Fees and Other 5.3% Income

Jurisdictions

ducing Income Taxes Act , for further details.

“Other 5.3% income” includes the following items.

Enter the total tax paid to other jurisdictions on

Note: Massachusetts adopts the federal exclusion

Enter the amounts and sources of each item. Do

income also reported on this return. The credit is

for qualified charitable distributions from IRAs and

not enter less than “0.” Enclose additional state-

limited to the amount of tax paid. If the tax was

Roth IRAs. See TIR 06-20, The Pension Protection

ments if more space is needed.

paid to Canada, the amount reported in this line

Act of 2006: Charitable IRA Distributions, for fur-

◗ All fee income, such as payments for jury duty,

must be reduced by the amount claimed as a for-

ther information.

election worker payments, director’s fees, com-

eign tax credit on U.S. Form 1040, line 47.

pensation received as executor or administrator

Schedule X, Line 2 Worksheet — Taxable

Line 7. Allowable Credit

of an estate, and commission income or tips not

IRA/Keogh Plan, Qualified Charitable IRA

Enter the smaller of lines 5 or 6 here and on

reported in line 5 of Form 1-NR/PY is taxable. Also,

Distributions and Roth IRA Conversion

Schedule Z, Part 2, line 12. Be sure to enter the

report all bartering income not reported on Sched-

Distributions

two-letter state or jurisdictional postal code for

ule C (the fair market value of goods or services

Complete this worksheet to report conventional

each state or jurisdiction for which you are taking

received in payment for your services).

IRA/Keogh distributions, qualified charitable

◗ All prizes and awards won by a nonresident in

the credit on Schedule Z. Visit the United State

IRA distributions or Roth IRA conversion

Postal Service’s website at and

a quiz program, drawing, beauty contest, etc. held

distributions.

click on “Service Guides” for a list of those codes.

in Massachusetts (part-year residents, whether

1. Total IRA/Keogh plan distributions, qualified

held inside or outside of Massachusetts) are tax-

charitable IRA deductions, Roth IRA conversion

Schedule X

able at fair market value. Awards and bonuses re-

distributions in 2006 . . . . . . . . . . . .

ceived from your employer for performance of

2. Total IRA/Keogh plan contributions

services in Massachusetts (part-year residents,

Other Income

previously taxed by Massachusetts

whether received from sources inside or outside

3. Total distributions received in

Be sure to enclose with Form 1-NR/PY.

of Massachusetts) are also taxable.

previous years . . . . . . . . . . . . . . . . .

◗ Other 5.3% income from Massachusetts

Line 1. Alimony Received

4. Subtract line 3 from line 2. If line 3 is larger

sources or received while a part-year resident, re-

than line 2, enter “0” . . . . . . . . . . . .

(part-year residents only)

ported on U.S. Form 1040, line 21, and not re-

5. Subtract line 4 from line 1 and enter the

If you received alimony payments, you must report

ported elsewhere in “5.3% Income” section on

result here. Not less than “0” . . . . .

them as income in line 1 of Schedule X. Report the

Massachusetts Form 1-NR/PY, must be reported

6. Total qualified charitable IRA distributions

portion of all periodic payments of alimony or sep-

in line 4 of Schedule X.

in 2006 included in line 1 . . . . . . . .

arate maintenance received under a court judgment

◗ Pre-1996 installment sales classified as ordinary

7. Taxable IRA/Keogh distributions or Roth

or decree, or for excess alimony amounts recap-

income for Massachusetts purposes (from Mass-

IRA conversion distributions. Subtract line 6

tured, as reported on U.S. Form 1040, line 11, re-

achusetts Schedule D, line 9) are taxed as 5.3% in-

from line 5 and enter result here.

ceived while you were a Massachusetts resident. If

come and must be reported on Schedule X, line 4.

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

you made alimony payments, you will be allowed to

◗ Embezzled or other income from illegal activi-

Note: You must complete separate worksheets

deduct these amounts on Form 1-NR/PY, line 19.

ties from Massachusetts sources or received while

if married filing a joint return and both you and

a part-year resident is taxable.

your spouse received IRA/Keogh Plan, qualified

Line 2. Taxable IRA/Keogh and

The following items should not be reported on

charitable IRA distributions, and/or Roth IRA

Roth IRA Conversion Distributions

your Massachusetts return:

conversion distributions.

◗ Any “net operating loss” reported as a negative

(part-year residents only)

amount on U.S. Form 1040, line 21 cannot be en-

Complete the Schedule X, line 2 worksheet to cal-

culate the taxable portion of any amount you re-

Instructions For Form 1-Nr/py - Massachusetts Nonresident Or Part-Year Resident Income Tax - 2006 Page 22

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