How bad is it (RE: TAXES) to live in New Hampshire and work in Massachusetts?

Question

If I were to take a job in Eastern Mass (Boston Area) but actually live in Southern New Hampshire, how bad would that screw me in taxes (income, personal, etc.) if at all? FYI - I'm married and the head of the household if that means anything...

Thanks!

Answer 1

You need to file a MA non-resident tax return, and be taxed on your wages that you earn in MA. The tax rate is 5.3% for MA. NH doesn't tax you on wages, so you can't get a credit for the income taxes you'll pay to MA. Also, property taxes are sky-high in NH, which I'm sure you know already.

Answer 2

"New Hampshire does not have a general sales tax or an income tax on an individual's reported W-2 wages" This is from the New Hampshire Department of Revenue web site. Therefore it would appear that you would continue to pay state income tax in MA regardless of how much W-2 income you had in NH. Just for information however for income tax purposes you can't be "married and head of household", those are two different filing status categories.

Answer 3

New Hampshire doesn't have an income tax so you don't get hit double. The only problem with New Hampshire is you pay a higher amount for property taxes if you own a property. Speaking from experience jobs in that part of Massachusetts pay more than jobs in New Hampshire and there are definitely more jobs too. Your income would be the only one taxed not anyone else in your household unless they worked in Massachusetts. They also have higher paying unemployment than New Hampshire if anything should happen to your job.

Answer 4

You will be paying the property taxes of a state with no income tax (higher) while still having your wages subject to a state income tax (5.3%-MA). Easy calc for making your decision, multiply 94.7% times your potential wages, less additional commuting expenses to travel to NH. This is your comparable income to what you could make in NH. Of course there are some deductions involved, but they are minmal if you are working in the Boston area. Based on some NH co-workers of mine, my hunch is that you will find the Boston income greater than that in NH so that the position is worth it.

Answer 5

You must pay MA tax if you earned income in MA. Property tax is higher in NH but also remember there is no sales tax or income tax in NH. I'm moving soon to NH and taking a job in MA. I now live in NY where income tax is high, sales tax is high, and property taxes are equal to NH. My house hold income will go up 10K after all taxes are paid, by living in NH, working in MA, and making the same amount of income. Just purchased a car in NY and paid $4000 in sales tax. NH has it's benefits.

Answer 6

You would have to pay MA income tax on your MA wages, but not other income received elsewhere. However, your salary would probably be higher. You would not have to pay sales tax, but your real estate tax may be higher, since that is a main source of tax income for the state of NH. The price of real estate may be lower, depending upon where in NH you live.
You need to run all these numbers for your specific situation.
I know people in this situation, and I think it is a wash, on average.

Answer 7

I live in NH, work in MA. I have to pay MA taxes, because that's where the money was earned.

I do have it deducted. At the same time, at the end of the year I file a MA state tax return as a non-resident status filer, and see what I can get back. Things like deductions, head of household, alimony, all apply, just as if you lived in MA.

So, you pay MA taxes if you work in MA, regardless of where you live. If you live in Salem, but work in Woburn, you'll see MA state deductions.

You can perhaps get around this if you are a consultant and receiving your money in NH (technically not, but it gets trickier for them to prove), but if you're a W-2 employee of a MA employer, you pay MA taxes. Case closed.

Answer 8

You'd have to pay MA income taxes as a non-resident on the income you earned in MA.

NH property taxes are INSANELY high as that it the principal source of revenue for NH which has no sales tax or income tax on earned income. NH does levy an income tax on dividend and interest income regardless of which state it's earned in.

Answer 9

Absolutely! MA taxes your world-wide income. If NH had an income tax, MA would give you a credit for the income taxes paid there. However NH does not tax earned income so that's a moot point.

Answer 10

I am an accountant I agree with most answers it is probably a wash in most cases. Not the legal wash as in accounting but you get the idea. In Accounting for example, a wash is you receive 50.00 for example for services, you expense 50.00 for an expense. For all purposes and intent you don't even have to keep track of the transactions. aka in accounting this is a wash.

Take for example, you do business in Oregon yet live in Washington State. For example, you are doing business in Portland Oregon yet living across the Columbia River in Vancouver Washington. In such case the tax consequence is no different. Though a resident may live in the non-taxing state as Washington has no personal income tax for example they would because they worked for example in Oregon, a state that does have personal income taxes, in preparing their non-resident return, there is no tax difference at all. It is the same as it would be for example if you were for example, living in the taxing state.

It is true, though states do not have sales taxes, you may realize the issues in other ways. I will use Oregon for example which has no General Sales Taxes. Period plain and simple you get jerked on the Oregon side of things. I prepared a return for a couple that lived in Oregon and I was curious so I prepared the same thing for him as though he may have lived in say Idaho and Utah and other states around the West. You would not believe the difference. I am not talking hundreds here either.

Feds it does not matter. Head of household of course being married you would not be filing head of household status unless you were separated and living apart and meeting other conditions. Otherwise it is only for single unmarried tax payers who have a qualifying dependent. Do not get confused this will burn you otherwise. If for example you did meet the quals to file as such HofH status your spouse would have to file as though they were single under such instance. It does not matter if you are both with children and dependants in separate houses. The laws are complex the understanding of them even greater. It is a primary reason why Dr. Einstein stated the Internal Revenue Code (IRC) was the most complex thing there was.

Your tax situation will vary with many things. Can you itemize, can you claim head of household, how many children do you have, do you own real estate, do you pay a lot in medical bills etc. Check out our 1040 Tax estimator on our site at http://www.bcbsinc.com if you're curious or need to review.

Your situation both with Feds and State will differ. But those states that have no General Sales taxes usually tag you hard just so as you know with property values, etc. etc. What a nitemare. Boston is a pretty city. I love that city. People are very nice in the New England States. I was stationed in Groton Ct. when in Subschool there. I found nothing but nice people there and not far from Cape Cod. I can see why you may wish to live there but I know Boston, Boston is heavily rated to be expensive. Higher wages but what will you pay for those wages. It is like do I go to MIT or do I go to the community college your question. What is cheap in Boston.

I recall one time that Boston was one city that was top rated for per capita crime. Do not know what the statistics are today but city living in Boston now that has got to burn big time if so.

Wayne Barney
President
BC Business Services, Inc.