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11109: MA - Credit for RI Disability Insurance


Massachusetts

How do I set up the MA credit for Rhode Island Temporary Disability Insurance payments withheld, from the amount shown on the W-2 Box 14?

 

Massachusetts allows credit for Rhode Island Temporary Disability Insurance (RI TDI) payments withheld as income tax paid to another state or jurisdiction, which appears on Part 2 of MA Sch. Z (MAZRF), and on worksheet MAWK_TC. Massachusetts does not allow credit for disability withholding by other states.

How you set up this MA credit for RI TDI depends on whether Rhode Island is the only state in the ST field (Box 15) on the W2.

W2 with only Rhode Island

On a single state W2, where only RI appears in box 15, enter code TDI in box 14 of screen W2. The associated RI TDI amount flows to MAWK_TC line 8 ("Enter the Total Tax paid to other jurisdictions…") per MA Personal Income Tax Directive 12-1. The RI TDI amount also flows to Sch. A, line 5, and to the Rhode Island return (if needed for Form RITX-16, Claim for Refund of Temporary Disability Insurance Tax).

W2 with Rhode Island and another state(s).

You can use either of the two methods below to produce the MA credit. In both, for the RI TDI amount to be included on Sch. A, you must enter an adjustment on line 5 of screen A. The amount does not flow to Sch. A. If you expect your Rhode Island return to produce Form RITX-16, Claim for Refund of Temporary Disability Insurance Tax, you must enter code TDI.

  • Enter code RITDI in Box 14 of screen W2. The RI TDI amount will be included in MA Sch. Z calculations but will not flow anywhere else.

-or-

  • Enter code TDI in Box 14 of screen W2. To include the RI TDI in the MA credit, edit MA Screen Z.
    • Enter the sum of the State Tax and the amount of RI TDI as an override on the Total tax paid on this income line.
    • Select Regular income and RI from the Other State Name drop list (press Page Down if you need a new screen for RI).

Note that the MA Credit For Taxes Paid calculations include MA limits on claiming RI TDI:

  1. If there is a Rhode Island Taxable Income Loss (or very low income) the RI TDI may be limited or zero (see worksheet MAWK_TC). A general step in the Credit for Taxes Paid calculation limits the MA credit to the lesser of:
    1. the other states taxable income times the Mass Rate (zero income X the MA tax rate is zero) or
    2. the Other state's Liability (including RI TDI)
  2. If the MA tax liability (net other credits) is already zero (or near zero) then the taxpayer may not be able to claim the full RI TDI because MA Credit for Taxes paid is not a refundable credit.

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