The Legislature passed a comprehensive tax relief bill that focuses heavily on relief for moderate-income constituents and shows responsiveness to today’s economic trends. This well-rounded legislation will offer assistance to nearly every resident of the state in one form or another. It offers a balanced approach that gives much-needed relief to hundreds of thousands of working families while also making the state a more competitive place to work and do business in, all at an affordable and reasonable cost.
Here are some of the ways it will impact folks in our Commonwealth:
Families: Over the next two years, the tax credit for dependents (children under age 13 or dependents over the age of 65 or disabled dependents of any age) will increase to $440, putting money back into the pockets of hundreds of thousands of families
Lower-income residents: an increase in MA’s earned income tax credit could mean an additional savings of $56 – $600+ per year; we expect this savings to impact nearly 400,000 of our taxpayers making $57,000 or less
Seniors: Massachusetts residents aged 65 who qualify for the senior circuit breaker tax credit will save an additional $1,200 per year. Seniors who participate in municipal volunteer work programs to reduce their property tax can now write off up to $500 more
Renters: Massachusetts renters can now deduct up to $4,000 of their rent from taxes each year, which will help some of our most vulnerable populations with current housing costs
Heirs: The threshold in MA will now be $2 million before estate taxes are applied
Investors: the short-term capital gains tax is lowered to 8.5%
MA-based businesses: to help our homegrown businesses and encourage others to come here, we’ve simplified the tax system to focus only on sales, rather than the three-tiered system we currently have
Housing advocates: This bill expands housing credits, HDIP and the Low Income Housing Tax Credit, which will greatly expand the construction of housing in the state, something that is sorely needed
Commuters: Public transit fares, as well as ferry and regional transit passes and bike commuter expenses, are now eligible for the commuter expense tax deduction
Cesspool and septic system users: the maximum tax credit for Title V cesspool or septic system users will triple to $18,000 and the amount claimable will increase to $4,000 per year, easing the burden on homeowners facing the high cost of septic tank replacement or repair
Cider producers: Raises the maximum amount of alcohol for these classes of drinks to 8½%, allowing more locally produced hard cider and still wines to be taxed at a lower rate
Other tax policy ramifications:
This bill will close a loophole in the Fair Share Amendment by requiring married couples to file joint state tax returns if they filed joint federal returns. This change will take effect next year and could generate between $200 and $600 million.
Chapter 62F payments will be restructured so that any payments made are equal for every taxpayer. This will create a fairer and more equitable payment distribution, should this law ever be triggered again.
