Last Updated: April 2026
New Hampshire and Massachusetts share a heavily travelled commuter border. Hundreds of thousands of New Hampshire residents work for Massachusetts employers, and since the pandemic, a growing number work from home in NH some or all of the time. The Massachusetts income tax system — and particularly its handling of NH residents working remotely — was the subject of a major legal battle between the two states that reached the US Supreme Court. The rules today are cleaner than during the pandemic period, but NH residents with any Massachusetts-source income still face important filing and documentation requirements. This guide covers the current rules, the historical context, and exactly how to calculate your liability.
Because your MA income tax liability depends directly on how many days you physically worked in Massachusetts, accurate day-tracking is essential for NH residents with hybrid work arrangements.
Any day you perform work in Massachusetts counts as a Massachusetts work day — including partial days. If you commute to Boston for a morning meeting and return to NH to work the rest of the day, Massachusetts treats that as a full MA work day for sourcing purposes. Days of travel entirely within MA (no work performed in NH) count as MA days. Days where you are travelling outside both states are generally not MA-source days.
Any day where all of your work is performed in New Hampshire counts as a NH work day for income sourcing. Working from your NH home office while connected to your employer's MA network does not make it a MA work day — physical presence in Massachusetts is required. A full day working from home in NH with no travel to MA: NH work day, not subject to MA income tax.
Maintain a contemporaneous record (updated daily or weekly): calendar entries showing work location, email timestamps showing NH vs MA physical location, badge swipe records if your employer tracks office entry, parking receipts, fuel receipts, or Commuter Rail tickets. The Massachusetts DOR audits NH residents on MA-source income claims and looks specifically for evidence of actual MA days worked. A home office with accurate daily logs that can be cross-referenced with electronic records is your best protection.
Many Massachusetts employers default to withholding MA income tax on 100% of NH resident employee wages — which is over-withholding for employees who work partial time in NH. Speak with your payroll department to set up day-tracking withholding. If you cannot adjust withholding during the year, file your MA non-resident return to claim a refund for the NH-day portion. Keep your day-tracking records so you can substantiate the refund claim.
The tax comparison between living in NH and working in MA varies significantly by commute frequency and income level.
Income: $120,000. MA income tax: $6,000 (5% of $120,000). NH income tax: $0. Total state income tax: $6,000. A comparable job in NH at $120,000: $0 total state income tax. The MA commute costs $6,000/year in income tax. Whether this is offset by higher MA salaries depends on the specific role and employer.
Income: $120,000. MA-source income: 60% × $120,000 = $72,000. MA income tax: $3,600. NH income tax: $0. Total state income tax: $3,600. Saving vs full-time MA commute: $2,400/year. The financial case for maximising NH work days is clear for those with the flexibility.
Under current law (post-September 2021): MA income tax: $0. NH income tax: $0. Total state income tax: $0. A NH resident working 100% remotely for a Massachusetts employer from their NH home owes no MA income tax and no NH income tax on wages. This is the most financially advantageous position and is legally valid under the current physical-presence sourcing rule.
New Hampshire has no income tax but has high property taxes — approximately 1.89% effective rate, the highest in New England. A $400,000 NH home generates approximately $7,560/year in property tax. A comparable $400,000 home in eastern Massachusetts generates approximately $5,000–$6,000/year (MA average ~1.3%). NH residents save on income tax but pay more on property. The break-even income level where NH's income tax saving exceeds the property tax premium is approximately $80,000–$100,000 for a typical homeowner.
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Massachusetts non-resident returns, NH remote worker day-tracking, and refund claims for over-withheld MA tax require a CPA who knows MA-NH sourcing rules. TaxHub connects you with state tax specialists.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get MA Non-Resident Tax Return Help →Under current law (since September 2021), no. Massachusetts only taxes income from work physically performed in Massachusetts. If you work 100% from your NH home and never physically work in Massachusetts, you have no Massachusetts-source income and owe no MA income tax. Your employer should not be withholding MA income tax from your wages in this scenario. If they are, file a MA non-resident return to reclaim the over-withheld amount. Keep records of your work location to support any potential audit.
In 2020, New Hampshire filed an original jurisdiction lawsuit against Massachusetts at the US Supreme Court, challenging the MA COVID emergency regulation that taxed NH remote workers as MA-source income. SCOTUS declined to hear the case in June 2021. However, this became moot because Massachusetts's COVID emergency state ended in September 2021, and the emergency regulation expired automatically at that time. Under current law, MA reverted to physical-presence sourcing — which is what NH wanted. NH residents who overpaid MA income tax during the 2020–2021 period should file amended MA non-resident returns for those tax years if they have not already done so.
Not necessarily. If you physically worked some days in New Hampshire, only the MA-work-day portion of your wages is Massachusetts-source income. If your employer's payroll system allocated 100% to Massachusetts, it is over-reporting MA-source wages. You have two options: (1) Ask your payroll department to set up state-specific day tracking and allocate wages correctly going forward; (2) File a Massachusetts non-resident return and report only your actual MA-source wages (based on your day-tracking records), generating a refund for any MA tax withheld on NH work days. Option 1 is cleaner; option 2 is the workaround if payroll cannot accommodate state allocation.
New Hampshire's I&D Tax (on interest and dividends) is fully repealed as of January 1, 2025. NH has no tax on wages, salaries, capital gains, rental income, or retirement income. NH residents who work entirely in NH pay 0% state income tax. The only state taxes NH residents pay are: property tax (the primary source of NH government revenue), meals and rooms tax (9% on restaurant meals and hotel rooms), and sales tax on a limited number of items. NH has no general state sales tax.
Yes — any day you perform work in Massachusetts, including attending meetings, client visits, or training, is a Massachusetts work day. Even a partial day trip to Boston for a morning meeting counts as a MA day. This is important for NH remote workers who assume they have no MA exposure: if you attend quarterly meetings, training sessions, or occasional office visits in Massachusetts, those days generate Massachusetts-source income. A NH resident who works 100% remote but travels to the Boston office 10 days/year for meetings: approximately 4% of their annual wages are Massachusetts-source, subject to MA income tax.
For self-employed individuals (sole proprietors, single-member LLCs), Massachusetts sources self-employment income based on where the services are performed — not where the client is located. A NH-based consultant with Massachusetts clients who performs all work from their NH home office: no MA-source income, no MA filing requirement. A NH consultant who travels to client sites in Massachusetts to perform services: those services create MA-source income proportional to the days worked in MA. A NH web developer who builds websites for Boston companies entirely from NH: no MA tax. A NH IT consultant who is on-site in Boston 3 days/week: 60% of income is MA-source.