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Old 03-20-2016, 10:31 AM
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mutual fund interest & dividend tax in non-resident state

In 2015, I was a resident of Rhode Island, but worked jobs in both Rhode Island and Massachusetts. Also, I reported ordinary dividends, qualified dividends, and capital gains from mutual fund investments on my federal 1040 (Adjusted Gross Income of ~$33k).

I used tax preparation software (TaxAct) to prepare my MA nonresident state return first, then my RI resident return, but it appears that the software wants to include all of my investment income (~6k) as taxable in both states.

Am I required to pay a tax on dividends and capital gains twice, in both Rhode Island and Massachusetts, even though I only lived in one state? Is this correct? When I fill out the MA Form 1 by hand, I'm able to specify interest and dividends to be excluded on Schedule B, Line 6.

I'm already paying taxes on my mutual fund investment income to the federal government, and to the state where I live. Do I really have to pay interest and dividend taxes in a state where I was not a resident, if that income was not earned there?

Thanks very much for any insights.

-chapink



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Old 03-20-2016, 03:25 PM
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In 2015, I was a resident of Rhode Island, but worked jobs in both Rhode Island and Massachusetts. Also, I reported ordinary dividends, qualified dividends, and capital gains from mutual fund investments on my federal 1040 (Adjusted Gross Income of ~$33k).

I used tax preparation software (TaxAct) to prepare my MA nonresident state return first, then my RI resident return, but it appears that the software wants to include all of my investment income (~6k) as taxable in both states.

Am I required to pay a tax on dividends and capital gains twice, in both Rhode Island and Massachusetts, even though I only lived in one state? =========>no I do not think so; you need to report your portfolio income only to your home state as you are a nonresident of MA;you need to report ONLY MA source inceom that you earned in MA to MA and even you may claim tax paid to MA on your home state return.



Is this correct? When I fill out the MA Form 1 by hand, I'm able to specify interest and dividends to be excluded on Schedule B, Line 6.======as said above; the portfolio income is not MA source income so no need to report it on yur MA return.

I'm already paying taxes on my mutual fund investment income to the federal government, and to the state where I live. Do I really have to pay interest and dividend taxes in a state where I was not a resident, if that income was not earned there?===========>>as mentioned above; you re not subject to double taxation on the portfolio income;since yu paid tax on the portfolio income to irs on your home state return you may claim some subtraction/credit you need to contact the dept of revenue of your home state.



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Old 03-20-2016, 03:42 PM
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Thanks very much Wnhough, for your reply. I'm grateful for the reassurance!



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