global Tax Massachusetts Unveils Tax Relief Package June 29, 2023 Massachusetts has unveiled a tax relief plan that is now in its final stretch in the House and Senate. Here are several major tax relief proposals in the works. Massachusetts Governor Maura Healey presented a relief proposal for the Bay State back in February. Earlier this month, Massachusetts state senators approved a $56 billion budget for the fiscal year 2024, forwarding along a package that preserves many of the central features of Healey's landmark tax relief package. Senators also endorsed a package similar to Healey’s, introducing several substantial tax relief initiatives. The package is now in the final stretch. Here’s a look at the different proposals and what could be on the horizon. Credit/DeductionGov. Healey ProposalHouse BillSenate BillChild & Family CreditHealey is proposing a $600 credit per qualifying dependent, including children, disabled adults, and seniors. The amount will be fully refundable, available at all income levels and uncapped regardless of number of dependents.The House is proposing to phase Healey's credit over the next 3 years. Fiscal year 2024 will be $310 per dependent, rising to $455 in FY 25, and $600 in FY 26.The Senate is proposing a credit for FY 24 of $310 per dependent, and no increases beyond fiscal year 2024.Earned Income Tax Credit (EITC)N/ABoth the House and Senate would like to increase the EITC from 30% to 40% of the federal credit, applicable to taxpayers with incomes under $57,000.Both the House and Senate would like to increase the EITC from 30% to 40% of the federal credit, applicable to taxpayers with incomes under $57,000.Estate TaxHealey’s proposal reduces estate taxes for all and eliminates tax on estates under $3 million.The House proposes raising the estate tax threshold to $2 million and removing the "cliff effect" taxing only the estates that exceed $2 million.The Senate proposes raising the estate tax threshold to $2 million via a $99,600 credit issued to all estates.Housing Development Incentive Program (HDIP)Healey proposes raising $10 million cap to $50 million in first year, to $30 million cap in subsequent years.N/AThe Senate proposes raising $10 million cap to $57 million in first year & $30 million cap in subsequent yearsLow Income Housing Tax CreditN/AN/AThe Senate proposes increasing annual funding from $40 million to $60 millionRental DeductionHealey proposes increasing the cap on the rent deduction to $4,000; current deduction is currently 50% of rent, capped at $3,000.SameSameSenior Circuit BreakerHealey proposes doubling the maximum allowed credit from $1,200 to $2,400.SameSameShort Term Capital GainsHealey’s proposal reduces the state tax on short term capital gains from 12% to 5% in one year.The House proposal reduces the state tax on short term capital gains from 12% to 5% over 2 years.N/ASingle Sales ApportionmentN/AThe House proposes transitioning Massachusetts from 3 factor apportionment to single sales apportionment.N/A We will keep you posted as things get finalized. Questions? Contact us.
