Live in Massachusetts, Work in California: Which State Taxes Your Paycheck?
Answer
California withholds and Massachusetts credits. Without an agreement between them, both states are entitled to tax income earned in California by a Massachusetts resident. The mechanism that stops you paying twice is the credit on the Massachusetts resident return, which is why the California return has to be completed first.
Last verified
Without an agreement between Massachusetts and California, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the California figure is an input to the Massachusetts return, so completing Massachusetts first means doing it twice.
A Massachusetts resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule OJC. The credit is capped at the Massachusetts tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · CaliforniaForm 540NR
File the California nonresident return FIRST — you need the California tax figure before you can complete Massachusetts.
- 2Resident return · MassachusettsSchedule OJC
File a Massachusetts resident return reporting all income, then claim the credit for tax paid to California. The credit is capped at what Massachusetts would have charged on that same income, so if California taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Massachusetts | California | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form 1-NR/PY | Form 540NR |
| Credit for other-state tax | Schedule OJC | Schedule S |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Massachusetts Department of Revenue | California Franchise Tax Board |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in California and working in Massachusetts gives:Both states — credit offsets the double tax.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: Massachusetts → CaliforniaHome state only
- 1099 contractor: Massachusetts → CaliforniaHome state, plus the client state if you work there
- Moved mid-year: Massachusetts → CaliforniaTwo part-year returns
Other Massachusetts pairs
Questions people actually ask
I live in Massachusetts and work in California. Which state takes the tax out of my paycheck?
California withholds and Massachusetts credits. Without an agreement between them, both states are entitled to tax income earned in California by a Massachusetts resident. The mechanism that stops you paying twice is the credit on the Massachusetts resident return, which is why the California return has to be completed first.
Which state should my employer be withholding for?
California. The wages are sourced to California, so California withholding is correct and there is no Massachusetts withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Massachusetts gives residents a credit for tax paid to California on the same income, claimed on Schedule OJC. The credit is capped at the Massachusetts tax on that income, so if California taxes it more heavily the excess is not refunded by either state.
How current is this?
The Massachusetts and California rules on this page were last checked against Massachusetts Department of Revenue and California Franchise Tax Board on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Massachusetts Department of Revenue — individual income taxaccessed 2026-08-07
- California Franchise Tax Board — individual income taxaccessed 2026-08-07