Returns

(b) Partnerships . Any partnership having a usual place of business in Massachusetts and federal gross income in excess of $100 during the tax year must file with the Commissioner on or before the 15th day of the fourth month following the close of the tax year, an information return, sworn to by a member of the partnership, on Form 3 and its schedules. The return must include the partnership's income or losses from Massachusetts sources; any deductions or credits attributable thereto; the names and addresses of the resident and non-resident partners; their distributive shares of the various classes of the partnership's income, losses, deductions or credits apportioned to each, and other information as required by Form 3 and its schedules. In general, a partnership must maintain an office or other place of business in the state (which may include an office that is neither owned nor rented by the partnership, but is provided by another party) in order for it to have a "usual place of business" in Massachusetts. It is not necessary that the place of business maintained in Massachusetts be the principal place of business of a partnership in order for it to be a usual place of business.

(c) Estates of Non-Resident Decedents . An executor or administrator of a non-resident decedent's estate deriving Massachusetts source income that meets other filing requirements must file with the Commissioner a return on Form 2, Fiduciary Income Tax Return, and all other required forms.

(d) Non-Resident Trusts. The trustee of a non-resident trust deriving Massachusetts source income that meets other filing requirements must file with the Commissioner a return on Form 2, Fiduciary Income Tax Return, and all other required forms.

(e) Payor's Information Returns . Every individual or entity doing business in Massachusetts must file information returns (such as the federal form W-2 or form 1099) with the Commissioner, on or before June 1st of each year, for each non-resident deriving income in Massachusetts to whom it has paid any income subject to Massachusetts income taxation. All returns must report the name and address of the non-resident recipient(s), the total amount paid to him or her during the preceding calendar year, the amount of Massachusetts source income, and the amount of Massachusetts tax withheld. See 830 CMR 62B.2.1(6). This requirement applies to payments to any entity, as described in 830 CMR 62B.2.1.

(f) Composite returns .

1. General rule. A pass-through entity may file a composite return on behalf of qualified electing non-residents reporting and paying income tax on the non-residents' pro rata or distributive shares of Massachusetts source income of the pass-through entity. a. Person responsible for filing . Each qualified electing non-resident member must give the pass-through entity a power of attorney authorizing a common member to act as the filing agent to represent the participating member in making, executing, and filing the return, and in acting on any matter relating to the return. The power of attorney shall include authorization of a successor to the filing agent. The filing agent must make the composite tax return using the pass-through entity's name and federal identification number, sign the composite tax return, and accept all notices from the Department of Revenue on behalf of any and all qualified electing non-residents. b. Qualified electing non-residents . A non-resident who meets all of the following criteria is a qualified electing non-resident: i. the person must be an individual, or an entity that is taxed under the Code as an individual, such as an electing small business trust (ESBT), or the estate or trust of a deceased non-resident; ii. the person must be a non-resident for the entire tax year; iii. the person must elect to be included in the composite return by signing, either as individual or as trustee, the statement required under 830 CMR 62.5A.1(11)(f)3; and iv. the person must waive the right to claim deductions, exemptions, and credits allowable under M.G.L. c. 62, §§3, 5, and 6 on income reported on the composite return. c. Tiered pass-through entities. To prevent multiple composite returns on the same income, an upper-tier pass-through entity that recognizes distributive share income is not required to file a composite return on non-resident member income generated by a lower-tier entity that the lower-tier entity has already reported on a composite return. d. Special rule for trusts that are not taxed under the Code as individuals . Trusts that are not taxed as individuals under the Code may be qualified electing non-residents if each beneficiary of the trust that receives Massachusetts-source income would qualify to join in the filing of a composite return under 830 CMR 62.5A.1(11)(f)(1)(b)(i - iv). In addition to other requirements under 830 CMR 62.5A.1(11)(f), the trust must file a statement with the composite return that contains the name and federal identification number of each beneficiary of the trust that receives Massachusetts-source income. The statement must affirm that each beneficiary meets the requirements of 830 CMR 62.5A.1(11)(f)(1)(b)(i - iv). e. Withholding requirement . To the extent applicable, a pass-through entity is subject to the withholding requirements at 830 CMR 62B.2.2. 2. Composite returns and other filing obligations. a. General rule. The filing of a composite tax return and composite payments of estimated taxes will satisfy the obligation, as to any Massachusetts-source income derived from the pass-through entity, of each qualified electing non-resident to file a tax return and to make estimated tax payments under M.G.L. c. 62C, § 6, and M.G.L. c. 62B, § 13. b. Limitations of composite returns. i. deductions, exemptions, and credits allowable under M.G.L. c. 62, §§ 3, 5, and 6 may not be claimed on a composite return. ii. for purposes of the statute of limitations on assessments provided in M.G.L. c. 62C, § 26(b), the statutory period will apply with regard to the composite return and items of income required to be reported on a composite return; the Commissioner will not, however, treat a composite return as a return by the individuals on whose behalf it is filed. c. Separate tax return in addition to composite return. i. Separate tax return required for other Massachusetts-source income. A taxpayer with Massachusetts-source income other than that reported on one or more composite returns, or with a separate filing obligation, must ensure timely payment of tax through withholding or estimated payments with respect to such income and must report such income on a separate tax return filed in addition to any composite returns filed on the taxpayer's behalf. A taxpayer subject to personal income tax may claim a share of exemptions and deductions based only on the income reported on the separate return, as calculated under 830 CMR 62.5A.1(7) and (8). ii. Required information on separate tax return. A person filing a separate income tax return for whom one or more composite returns are also filed must identify, on the separate income tax return, the name, address, and federal identification number of all entities filing composite returns on that person's behalf. 3. Filing Statement . Each person participating in the filing of a composite return must sign under penalties of perjury a statement affirmatively stating the person's qualifications and election to file a composite return. The person must submit this filing statement to the filing agent, who must retain the statements in his or her records. The statement must include the following information: a. the name and taxpayer identification number of the pass-through entity; b. the person's taxpayer identification number and the exact address of the person's principal place of residence; c. an acknowledgment of the person's obligation to file a return, make estimated tax payments if required, and pay his or her pro rata share of any penalty and interest due for any underpayment of estimated taxes; d. an agreement to be subject to jurisdiction in Massachusetts; e. a statement of waiver of the right to claim, with regard to the income reported on the composite return, any deductions, exemptions, and credits allowable under M.G.L. c. 62, §§ 3, 5, and 6; and f. a power of attorney authorizing the filing agent to represent the qualified electing non-resident in making, executing, and filing the composite return, making tax payments and estimated tax payments, and authorizing the filing agent to receive notices from the Department of Revenue on behalf of the non-resident. A properly completed Massachusetts Power of Attorney Form M-2848 attached to the qualified electing non-resident's statement will fulfill the power of attorney authorization requirement. 4. Composite Return filing requirements . The filing agent must file composite returns electronically. The total Massachusetts source income reported on the composite return shall be the sum of all the qualified electing non-residents' Massachusetts-source income. Persons included in the composite return filing must have the same tax year. 5. Components of the Composite Return. The filing agent shall submit as part of the return: a. a statement signed by the filing agent under penalties of perjury, certifying that: (i) each non-resident included in the composite return has executed the statement required by 830 CMR 62.5A.1(11)(f)3; (ii) those statements are on file at the principal office in Massachusetts of the pass-through entity; and (iii) the filing agent signing the composite return is authorized to act as such under power of attorney. The statement shall provide the address of the principal office in Massachusetts of the pass-through entity, or the address of the pass-through entity if there is no Massachusetts office. b. a schedule showing the name, tax identification number, address, method of tax compliance, Massachusetts-source distributive share items of each non-resident member of the pass-through entity, and any other information the Commissioner requires. The schedule shall specify which non-residents are participating in the composite return. 6. Composite Payments of Estimated Tax . Composite payments of estimated tax must satisfy the estimated payment obligations for each electing non-resident with regard to the Massachusetts-source income of the pass-through entity. The filing agent shall make payments of estimated tax electronically, through ACH debit. Estimated tax payments made by individuals cannot be credited against tax due with the composite return. Individuals who have made such payments with respect to a tax year and desire to participate in a composite return filing for that year may file a separate income tax return and request a refund of any overpaid taxes. 7. Extension of Time to File . The filing agent may obtain an extension of time to file the composite return in the same manner as an individual filer obtains an extension. An extension of time to file does not affect the due date for payment of tax. 8. Due Dates . The following due dates apply to 830 CMR 62.5A.1(11)(f): a. A qualified electing non-resident must submit the filing statement required under 830 CMR 62.5A.1(11)(f)3 to the pass-through entity on or before the last day of the first month of the entity's taxable year, or within thirty days of joining the entity. b. A composite return is due on the same date that the return of an individual would be due, and may be allowed the same extensions granted individuals under M.G.L. c. 62C, § 19. c. Composite payments of estimated tax are due on April fifteenth of the tax year, June fifteenth of the tax year, September fifteenth of the tax year, and January fifteenth of the following tax year. 9. Filing Instructions . The filing agent shall submit the composite return and composite payments of tax in accordance with the filing instructions at the Department of Revenue web site, www.mass.gov/dor . 10. Special Rules . The following special rules apply to composite returns and composite payments of estimated tax: a. The filing agent is merely an agent for the qualified electing non-residents and each qualified electing non-resident is personally responsible for timely filing of returns and payment of his or her tax liabilities. Non-residents are subject to the same requirements for filing tax returns and the same penalties for failure to file or failure to pay their tax as other taxpayers. b. A non-resident taxpayer has the right to file an individual amended return. The Commissioner retains the right to require the filing of an individual non-resident personal income tax return by any of the qualified electing non-residents. The filing of an individual tax return will not, ordinarily, affect the validity of the original composite return for the tax year to which the individual return required by the Commissioner relates. c. A pass-through entity may file an amended composite return on behalf of electing non-residents only if it filed an original composite return on their behalf.

(g) Composite Returns for Tiered Pass-through entities . A tiered group of pass-through entities (a pass-through entity with one or more members that are also pass-through entities) may file a single composite return on behalf of its non-resident members if each entity and individual taxpayer is otherwise eligible to participate in the filing of a composite return. The following additional requirements must also be met:

1. Each of the pass-through entities must join in the filing of a single composite return on behalf of its qualified electing non-residents, and the filing agent of each entity must sign the return. 2. A schedule must be submitted with the composite return indicating each qualified electing non-resident's distributive share of Massachusetts source income from each pass-through entity, and the total amount of Massachusetts source income received by each taxpayer from all the pass-through entities combined. 3. A statement must be submitted with the composite return disclosing the group's ownership structure, the identity of each member, (including name, address, and federal identification number), the nature and extent of ownership interests, and the identity of each partner or member of all of the related entities from which participating non-residents directly or indirectly derive Massachusetts source income. 4. The return must indicate that it is a tiered entity composite return.