Nonresident Composite Return

Massachusetts allows a partnership or an S corporation to file a composite return and make estimated tax payments as an agent on behalf of two or more qualified electing nonresident partners/ shareholders. This option is also available to professional athletic teams who may file a return on behalf of two or more qualified electing nonresident team members. Eligible members of a composite return must meet the following requirements:

must be an individual or the estate or trust of a deceased nonresident partner;
must not have filed a separate return in Massachusetts for the tax year in question;
must be nonresidents for the entire taxable year;
must not have any other Massachusetts source income;
must elect to be included in the composite return by signing a statement; and
must waive the right to claim deductions, exemptions and credits allowable under Ch. 62, secs. 3, 5 and 6. Taxpayers filing a nonresident composite return should enter 0 on Form 1-NR/PY, lines 20 (total deductions), 22 (exemption amount) and 35 (total credits).

Any professional athletic team that has two or more qualified electing nonresident team members may file a composite tax return as an agent for the qualified electing nonresident team members. Each electing nonresident team member must sign under penalties of perjury a statement affirmatively stating such team member's qualifications and election to file a composite return. The composite return is filed on Massachusetts Form 1-NR/PY along with the applicable schedules and attachments.

The total Massachusetts gross income reported on the composite Form 1 NR/PY must be the sum of all the qualified electing nonresident members' Massachusetts source income.

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