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Tax Law (Questions About Taxes)/MA Resident but Live Overseas


Dear Mr. Zemelman,

We currently live overseas in Vietnam (we just moved last July). Before our departure we lived in CT but owned a second home in MA. When we left CT we got MA driver's licenses and register to vote there. We pay 35% tax on our income to Vietnam and have resident cards for living in Vietnam so we are all set with our tax filing with the Federal government but am I having a very hard time with MA.  According to what I have read, because we own a home, have drivers licenses, and register to vote in MA it is considered our domicile and therefore we are residents.  Therefore it appears that we are liable for taxes on our world wide income although we are only at our house in MA for 5 weeks of the entire year.  We do not rent our house out although we have friends who use it and look after it for us. Are the above assumptions correct?  Are we residents of MA and do we need to file a tax return and pay on our world wide income although we do not make the money there and pay hefty taxes in Vietnam?

My other major question is that is we are residents of MA we have to have health insurance that meets the MCC.  Our insurance has never lapsed and is very good coverage. Although I have insurance my accountant is telling me I have to pay the health care penalty because it is not MA bought insurance.  This seems crazy.  Do you have any ideas about this?

Thank you very much for your help.  I really appreciate it.  I have been going round and round in circles for months.

Dear Heather,

State residency issues is the most complicated area of expat returns - albeit the federal part can hardly be considered simple.

You are not required to file MA tax return (see for residency requirements in MA).

To the same extent you are not required to maintain health insurance in MA or pay penalties for not having one while you live abroad.

I would recommend keeping the length of stay in MA slightly below 5 weeks to safeguard your qualification for complete full-year foreign earned income exclusion (see

Hope this helps,

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IJ Zemelman, EA MBA


I am an IRS-authorized EA and principal of a Tax Preparation firm focusing on U.S. Expatriates. We specialize in all tax issues faced by American citizens living abroad - such as foreign earned income, tax treaties, foreign spouse, etc. Visit our website - - for more information.


18 years professional tax experience, 12 with expatriate taxes.

Expatriate tax information on

MBA from Zicklin School Of Business, IRS Enrolled Agent

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