Why Does Lawful Money Not Work for Massachusetts, New Jersey and Pennsylvania
Each state is allowed to levy taxes under its state constitution as it sees fit. This means that indirect taxes, such as the income and capital gains taxes, may be levied without remedy (i.e. redeeming in lawful money) due to laws passed by the sovereign entity (i.e. the republic of [state]). This means that anyone who has withholdings in these states, Massachusetts, New Jersey and Pennsylvania, will be unable to receive a refund of those funds.
For example, Pennsylvania law only allows four deductions against income: Medical Savings Account contributions, Health Savings Account contributions, IRC Section 529 Qualified Tuition Program contributions, and IRC Section 529A Pennsylvania ABLE Savings Account Program contributions. A workaround is to open an entity or place one's address in another state and then receive the income as a non-resident.
NOTE: Some states require a filing of a "Non-Resident Tax Return" when income is earned within the state, despite one's situs / address being in another state. Sadly, Massachusetts and New Jersey currently have these requirements.
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