Mass. Gen. Laws » Part I Title IX Chapter 62
Massachusetts General Laws

Mass. Gen. Laws ch. 62, § 5A (2026)

Taxation of income earned by non-residents; regulations; certain military personnel

✓ current as of July 2026
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[Subsection (a) effective for taxable years beginning on or after January 1, 2023. See 2023, 28, Secs. 107 and 115.]

Section 5A. (a) The amount of Part A taxable income, Part B taxable income and Part C taxable income of any nonresident of the commonwealth derived from the Massachusetts gross income of such person shall be taxed in accordance with section 4. Where the sum of Part A taxable income, Part B taxable income and Part C taxable income exceeds $1,000,000 in a taxable year, the portion of such taxable income exceeding $1,000,000 shall be taxed in accordance with paragraph (d) of said section 4. In determining such sum, any negative amount or loss in any Part of taxable income may not be applied to reduce income in any other Part or otherwise be applied to reduce such sum. The commissioner may promulgate regulations or issue other guidance as necessary or appropriate to implement this subsection. The Massachusetts gross income shall be determined solely with respect to items of gross income from sources within the commonwealth of such person and in determining the adjusted gross income of each Part only those deductions shall be allowed which are attributable to items included in Massachusetts gross income as so determined; provided, however, that for purposes of determining the gross income of a non-resident individual from sources within the commonwealth, the provisions of sections 1 to 2A, inclusive, of chapter 63 shall apply to a partnership subject to the definition of a financial institution in clause 9 of section 1 of chapter 63 which as of January 1, 1995, was subject to supervision and examination by the commissioner of banks and whose partners have been subject to tax with respect to income from said partnership under the provisions of chapter 62 and have been filing in the commonwealth on that basis. Items of gross income from sources within the commonwealth are items of gross income derived from or effectively connected with: (1) any trade or business, including any employment carried on by the taxpayer in the commonwealth, whether or not the nonresident is actively engaged in a trade or business or employment in the commonwealth in the year in which the income is received; (2) the participation in any lottery or wagering transaction within the commonwealth, including gaming winnings acquired at or through a gaming establishment licensed under chapter 23K or sports wagering winnings acquired through a sports wagering operator licensed under chapter 23N; and (3) the ownership of any interest in real or tangible personal property located in the commonwealth. In computing the taxable income of each Part, the nonresident shall be allowed the deductions and exemptions provided as to each Part in section 3. For purposes of this section, gross income derived from or effectively connected with any trade or business, including any employment, carried on by the taxpayer in the commonwealth shall mean the income that results from, is earned by, is credited to, accumulated for or otherwise attributable to either the taxpayer's trade or business in the commonwealth in any year or part thereof, regardless of the year in which that income is actually received by the taxpayer and regardless of the taxpayer's residence or domicile in the year it is received. It shall include, but not be limited to, gain from the sale of a business or of an interest in a business, distributive share income, separation, sick or vacation pay, deferred compensation and nonqualified pension income not prevented from state taxation by the laws of the United States and income from a covenant not to compete. The foregoing shall not be deemed to include income from qualified tax-deferred retirement plans which are exempt from taxation under any other provision of this chapter.

(b) The commissioner shall adopt regulations providing for the method of determining the items and amounts of Massachusetts gross income derived from sources within the commonwealth by a non-resident, based upon the method set forth in section thirty-eight of chapter sixty-three or upon any other reasonable method.

(c) In applying this section, the compensation paid by the United States to its uniformed military personnel assigned to duty at military posts, bases or stations within the commonwealth for services rendered by said personnel while on active duty, shall be deemed to be from sources other than sources within the commonwealth.

(d) For purposes of this section, the ownership of an interest in real property located in the commonwealth shall include, without limitation, the ownership of an interest in a partnership, to the extent that the partnership holds an interest in real property located in the commonwealth.

Notes of Decisions
Cited in 10 cases (1 in the last 5 years), 1960–2025 · leading case: Deveau v. Comm'r of Revenue, 746 N.E.2d 565 (Mass. App. Ct. 2001).
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Deveau v. Comm'r of Revenue, 746 N.E.2d 565 (Mass. App. Ct. 2001). · cites it 12× “The board ruled that the partnerships, by investing partnership assets in notes secured by mortgages, were in the business of providing financing for private borrowers in the Commonwealth which generated source income taxable to the nonresident partners under G. L. c. 62, §…”
Comm'r of Revenue v. Oliver, 27 Employee Benefits Cas. (BNA) 2454 (Mass. 2002). · cites it 10× “The Appellate Tax Board (board) concluded that the pension payments were not Massachusetts-source income and therefore not *468 taxable under G. L. c. 62, § 5A, for the applicable tax years.”
Comm'r of Revenue v. Dupee, 670 N.E.2d 173 (Mass. 1996). · cites it 2× “*620 The commissioner contended before the board, and contends here, that the plain language of G. L. c. 62, § 5A (a) (1), requires only that Dupee’s gain on the sale of his BCI interest be “derived from” or “effectively connected with” a Massachusetts trade or business and…”
Horst v. Comm'r of Revenue, 449 N.E.2d 667 (Mass. 1983). · cites it 3× “Items of gross income from sources within the commonwealth are items of gross income .”
Vautier, 164 N.E.2d 317 (Mass. 1960). · cites it 2× “The first request in broad sweep sought a ruling that G. L. c. 62, § 5A, is in violation of the Constitution of the Commonwealth and of the Constitution of the United States of America.”
Bank of Am., N.A. v. Comm'r of Revenue, 54 N.E.3d 13 (Mass. 2016). “During that year, none of the subject trusts had any Massachusetts source income that was taxable under G. L. c. 62, § 5A, and no identified beneficiary to whom income was payable from these trusts was an inhabitant of the Commonwealth.”
Comm'r of Revenue v. Destito, 503 N.E.2d 986 (Mass. App. Ct. 1987). “The board correctly upheld Destito’s contention that, because the board found Destito was not required to perform any work whatsoever in Massachusetts in 1981 (and performed no work there), he was not liable to tax under G. L. c. 62, § 5A, which (as amended by St.”
Dotson v. Comm'r of Revenue, 974 N.E.2d 69 (Mass. App. Ct. 2012). “At the board, the commissioner presented and preserved the separate contention that, even if Dotson were not domiciled in Massachusetts at the pertinent time, the stock proceeds constituted nonresident taxable “Massachusetts-source income” within the meaning of G. L. c. 62, §…”
Comm'r of Revenue v. Chinchillo, 629 N.E.2d 974 (Mass. 1994). “The Horst case concerned § 63 (d), which, unlike § 63 (e), refers (in conjunction with G. L. c. 62, § 5A [1992 ed.]) to the matter of the taxation of out-of-State sellers (“All items of federal gross income arising from such installment transactions shall be deemed to be income…”
Craig H. Welch & Another v. Comm'r of Revenue (Mass. App. Ct. 2025). · cites it 7× “The central issue before us is whether the gain from that sale was Massachusetts source income subject to tax under G. L. c. 62, § 5A, and 830 Code Mass. Regs.”
— Mass. Gen. Laws ch. 62, § 5A(a) — 1 case
Dotson v. Comm'r of Revenue, 974 N.E.2d 69 (Mass. App. Ct. 2012). “At the board, the commissioner presented and preserved the separate contention that, even if Dotson were not domiciled in Massachusetts at the pertinent time, the stock proceeds constituted nonresident taxable “Massachusetts-source income” within the meaning of G. L. c. 62, §…”
— Mass. Gen. Laws ch. 62, § 5A(a)(3) — 1 case
Deveau v. Comm'r of Revenue, 746 N.E.2d 565 (Mass. App. Ct. 2001). “The board ruled that the partnerships, by investing partnership assets in notes secured by mortgages, were in the business of providing financing for private borrowers in the Commonwealth which generated source income taxable to the nonresident partners under G. L. c. 62, §…”
— Mass. Gen. Laws ch. 62, § 5A(a)(l) — 1 case
Deveau v. Comm'r of Revenue, 746 N.E.2d 565 (Mass. App. Ct. 2001). “The board ruled that the partnerships, by investing partnership assets in notes secured by mortgages, were in the business of providing financing for private borrowers in the Commonwealth which generated source income taxable to the nonresident partners under G. L. c. 62, §…”
— Mass. Gen. Laws ch. 62, § 5A(o)(l) — 1 case
Deveau v. Comm'r of Revenue, 746 N.E.2d 565 (Mass. App. Ct. 2001). “The board ruled that the partnerships, by investing partnership assets in notes secured by mortgages, were in the business of providing financing for private borrowers in the Commonwealth which generated source income taxable to the nonresident partners under G. L. c. 62, §…”
— Mass. Gen. Laws ch. 62, § 5A(ti) — 1 case
Deveau v. Comm'r of Revenue, 746 N.E.2d 565 (Mass. App. Ct. 2001). “The board ruled that the partnerships, by investing partnership assets in notes secured by mortgages, were in the business of providing financing for private borrowers in the Commonwealth which generated source income taxable to the nonresident partners under G. L. c. 62, §…”
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