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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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