Massachusetts taxes nonresidents on income from MA sources. Your MA wages are fully taxable. File MA Form 1-NR/PY (Nonresident/Part-Year Resident Income Tax Return) at year-end. Massachusetts uses a flat income tax rate on most income types. Check the MA DOR for the current rate.
Do I owe any New Hampshire state tax on my wages?
No. New Hampshire does not impose an income tax on wages, salaries or earned income. Your only state tax obligation is to Massachusetts. NH historically had an Interest and Dividends Tax on investment income, but this tax has been phased out. Check the NH Department of Revenue for current status.
| Tax layer | Owed? | Details |
|---|---|---|
| Federal income tax | Yes | IRS Form 1040 |
| Massachusetts income tax | Yes (MA-source wages) | MA Form 1-NR/PY |
| New Hampshire income tax on wages | No | NH does not tax wages |
What is the Massachusetts remote work tax controversy?
During and after the pandemic, Massachusetts adopted a rule taxing nonresidents who worked remotely from their home state if their office was in Massachusetts. NH residents working from home for MA employers could be taxed by Massachusetts on days they never set foot in MA.
New Hampshire challenged this policy, arguing Massachusetts cannot tax income earned by NH residents within NH borders. The case raised fundamental questions about state taxing authority in the remote work era.
Before assuming your remote workdays are exempt from MA tax, check the current MA DOR guidance on nonresident telecommuter taxation. The rules may have evolved since the initial pandemic-era policy.
(Current MA rate at mass.gov/dor.)
How do I set up withholding with my MA employer?
Your MA employer withholds Massachusetts income tax. Since NH has no wage tax, there is no NH withholding. File MA Form M-4 to configure MA withholding. Unlike reciprocity states, you cannot file an exemption from MA tax — Massachusetts has the right to tax your MA-source wages.
Is living in NH better for taxes than living in MA?
For commuters who physically work in MA, the wage tax burden is similar either way — you pay MA's rate on MA wages regardless. The NH advantage is on non-MA income: investment returns, side business income from NH, and other non-MA-source income escape state tax entirely. A MA resident would pay MA tax on all of it.
What if I moved between NH and MA mid-year?
File MA Form 1-NR/PY as a part-year resident/nonresident. MA taxes you as a resident during your MA residency period (all income) and as a nonresident for the NH period (only MA-source income). No NH return is needed. Compare take-home using the MA salary calculator and NH salary calculator.
What about other types of income — investment, rental, business?
Massachusetts taxes nonresidents only on MA-source income. If you have investment income, rental income from property outside MA, or business income earned in New Hampshire, that income is not MA-source and Massachusetts cannot tax it. Since NH does not tax wages or most other income, this non-MA income escapes state tax entirely. This is the biggest advantage of NH residency compared to living in Massachusetts, where all income is taxed at the flat rate.
What about local taxes in Massachusetts or New Hampshire?
Massachusetts does not have a local income tax layered on top of the state tax. Your MA obligation is simply the state's flat rate on your MA-source income. New Hampshire likewise does not have local income taxes on wages. The MA-NH crossing is among the cleanest from a local-tax perspective — no county piggyback, no municipal income tax, no occupational fee.
This is notably different from crossings like Michigan-Ohio or Ohio-Kentucky, where local taxes create significant additional obligations that state reciprocity does not address.
How does the MA tax on nonresidents work for part-year residents?
If you moved from Massachusetts to New Hampshire mid-year, file MA Form 1-NR/PY as a part-year resident. MA taxes all your income during the months you lived in MA (as a resident, worldwide income is taxed). After moving to NH, MA taxes only your MA-source income as a nonresident. NH has no return to file for either period. The key tax planning benefit of this move is that post-move non-MA income drops off MA's radar entirely.
How does the MA flat tax compare to other New England states?
Massachusetts uses a flat income tax rate — the same percentage applies to all levels of taxable income. This is simpler than the graduated brackets used by Connecticut, Vermont and other New England states. For NH residents, the flat rate means your MA tax obligation is straightforward to calculate: your MA-source wages multiplied by the flat rate, minus any applicable deductions and credits.
In recent years, Massachusetts voters approved a "millionaires tax" surcharge on income above $1 million. If your MA-source wages exceed that threshold, the surcharge applies on the excess. Check the MA DOR for the current flat rate and surcharge details.
Questions
Frequently asked questions
How does Massachusetts tax New Hampshire residents who work there?
Massachusetts taxes nonresidents on income from MA sources. Your MA wages are fully taxable. File MA Form 1-NR/PY (Nonresident/Part-Year Resident Income Tax Return) at year-end. Massachusetts uses a flat income tax rate on most income types. Check the MA DOR for the current rate.
Do I owe any New Hampshire state tax on my wages?
No. New Hampshire does not impose an income tax on wages, salaries or earned income. Your only state tax obligation is to Massachusetts. NH historically had an Interest and Dividends Tax on investment income, but this tax has been phased out. Check the NH Department of Revenue for current status.
What is the Massachusetts remote work tax controversy?
During and after the pandemic, Massachusetts adopted a rule taxing nonresidents who worked remotely from their home state if their office was in Massachusetts. NH residents working from home for MA employers could be taxed by Massachusetts on days they never set foot in MA.
How do I set up withholding with my MA employer?
Your MA employer withholds Massachusetts income tax. Since NH has no wage tax, there is no NH withholding. File MA Form M-4 to configure MA withholding. Unlike reciprocity states, you cannot file an exemption from MA tax — Massachusetts has the right to tax your MA-source wages.
Is living in NH better for taxes than living in MA?
For commuters who physically work in MA, the wage tax burden is similar either way — you pay MA's rate on MA wages regardless. The NH advantage is on non-MA income: investment returns, side business income from NH, and other non-MA-source income escape state tax entirely. A MA resident would pay MA tax on all of it.
- 🔄 Last updated July 31, 2026 · Tax year 2026
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