MA NRCR: Nonresident Composite Return and Instructions (2024)

Who files this form

Massachusetts allows a partnership or S corporation to file Form MA NRCR on behalf of two or more qualified nonresident members who elect to participate. It is a composite return filed by the entity as their agent.

Participating members must:

• Be individuals, entities taxed as individuals under the Internal Revenue Code, or estates or trusts of deceased nonresident members.
• Be nonresidents for the entire tax year and all have the same tax year.
• Sign a statement electing to participate.
• Agree to Massachusetts tax jurisdiction.
• Waive the right to claim deductions, exemptions and credits allowed under MGL chapter 62, sections 3, 5 and 6.

Professional athletic teams filing a composite return for qualified nonresident team members must use Form 1-NR/PY, not Form MA NRCR.

When it's due

• 2024 calendar-year return: File on or before April 15, 2025.
• 2024 estimated tax payments: Include on line 19 any last-quarter payment made on or before January 15, 2025.
• 2024 extension payments: Report on line 20 payments made with Form M-4868 on or before April 15, 2025.

An automatic six-month filing extension is available if at least 80% of the total tax ultimately due is paid by the prescribed payment date. Composite payments must satisfy each eligible member’s individual payment requirement for the pass-through entity’s Massachusetts-source income.

What you'll need

Have these records and forms ready, as applicable:

• The filing entity’s full name, address and federal identification number, plus the filing agent’s name.
• Signed participation statements from electing members. For a tiered entity composite return, the filing agent must have signed statements from the filing agents of participating entities.
• Massachusetts-source income information for all participating members, including income from upper-tier entities included in the return.
• Schedules B, D and E when applicable. File the relevant schedule if any member has an entry, regardless of amount.
• Electronic Schedule 2K-1, 3K-1 or SK-1 for participating members, following the special instructions for tiered entities.
• Records of estimated payments, prior-year overpayments applied to this year, extension payments and applicable PTE excise payments.
• Schedule TDS if disclosing an inconsistent filing position.

Complete Form M-8453 CR, the signature document, and retain it in your files.

How to file

File electronically. Form MA NRCR and all accompanying schedules must be e-filed. Paper returns will not be accepted. Electronic filing requirements also apply to amended returns and disputes.

Use the participating members’ personal tax year, which is the same as their federal tax year. Report combined amounts for all participating members and enter the designated filing agent’s electronic signature.

Make estimated tax payments and pay any balance due online through MassTaxConnect. Pay the balance in full with the electronically filed return.

For electronic filing questions, call 617-887-6367 or review the DOR electronic filing and payment requirements.

Common mistakes

• Sending a paper return: DOR will not accept it. The return and accompanying schedules must be filed electronically.
• Reporting the 4% surtax on MA NRCR: The surtax is not reported on this form. Nonresident taxpayers whose total taxable income exceeds the surtax threshold must file Form 1-NR/PY, even if they participate in a composite return.
• Counting prior-year payments twice: Do not include a prior-year refund on line 18, and do not include the amount on line 18 again on line 19.
• Overlooking an inconsistent filing position: Disclose it using Schedule TDS. Failure to disclose can result in an additional penalty.
• Applying an overpayment to next year without considering the restriction: Once elected, that amount cannot later be refunded or applied to additional tax owed for the current year.
• Waiting to file because full payment is not possible: The instructions advise filing when due even if you cannot pay in full. Late filing and late payment can result in interest and penalties.

Questions people ask

Which tax year should the composite return use?

Use the eligible members’ personal tax year, which matches their federal tax year. All participating members must have the same tax year. If they all use a fiscal year, the composite return must also use that fiscal year.

How do I correct a return already filed?

File an amended return electronically, enter the corrected information and fill in the “Amended return” oval. Complete the entire return and recompute the tax liability. Generally, an amended return must be filed within three years of the original filing date.

Can participating members receive a PTE excise credit?

A qualified member of an electing eligible pass-through entity is allowed a refundable credit equal to 90% of their proportionate share of PTE excise paid. For line 22, enter 100% of the applicable PTE excise paid in the box, then enter 90% of that amount on the line.

Can DOR discuss the return with the paid preparer?

Yes, if you select the authorization oval in the signature area. This applies only to the individual preparer who signed the return. It does not authorize the preparer to receive a refund, bind you to additional tax liability or otherwise represent you before DOR.

Official sources

• https://www.mass.gov/lists/dor-tax-forms-and-instructions