Summary: Tax Relief Legislation

Governor Healey has signed into law H.4104, An Act to Improve the Commonwealth's Competitiveness, Affordability, and Equity, aimed at providing tax relief for residents and businesses. 

Below, please find a summary of measures included in the final legislation as signed into law. Click here to access the complete text of the legislation.

Single Sales Factor 

  • Moves Massachusetts from a sales tax apportionment system that factors in property, payroll, and sales to an apportionment that only considers sales, thereby removing a disincentive for Massachusetts companies to hire or grow in-state and making it more attractive for companies to headquarter in Massachusetts.

Commuter Transit Benefits

  • Makes public transit fares, as well as ferry and regional transit passes and bike commuter expenses, eligible for the commuter expense tax deduction.

Housing Development Incentive Program (HDIP)

  • Increases the statewide cap from $10 million to $57 million one-time, and then to $30 million annually.

Local Option Property Tax Exemption for Affordable Housing

  • Permits municipalities to adopt a local property tax exemption for affordable real estate that is rented by a person whose income is less than a certain income level set by the community.

Senior Circuit Breaker Tax Credit

  • Doubles the maximum senior circuit breaker credit from $1,200 to $2,400, impacting approximately 100,000 seniors.

Earned Income Tax Credit

  • Increases the earned income tax credit from 30% to 40% of the federal credit, impacting approximately 400,000 taxpayers with incomes under $60,000.

Low Income Housing Tax Credit

  • Raises the annual authorization from $40 million to $60 million.

Title V Cesspool or Septic System Tax Credit

  • Triples the maximum credit available from $6,000 to $18,000 and increases the amount claimable to $4,000 per year, easing the burden on homeowners facing the high cost of septic tank replacement or repair.

Estate Tax

  • Reduces the estate tax for all taxpayers and eliminates the tax for all estates under $2 million by allowing a uniform credit of $99,600.

Rental Deduction

  • Increases the cap on the rental deduction from $3,000 to $4,000, impacting approximately 800,000 renters across the Commonwealth.

Short Term Capital Gains

  • Reduces the tax rate on short-term capital gains from 12% to 8.5%.

Child and Dependent Tax Credit

  • Increases the tax credit for a dependent child, disabled adult, or senior from $180 to $310 in taxable year 2023, and then to $440 in taxable year 2024 and beyond, per dependent, while eliminating the child/dependent cap.
  • This expanded credit will impact approximately 565,000 families.

Additional Tax Changes

  • Senior Property Tax Volunteer Program: Increases from $1,500 to $2,000 the maximum that municipalities may allow for certain seniors to reduce from their property tax by participating in the senior work-off program.

  • Lead Paint Abatement: Doubles the credit to $3,000 for full abatement and $1,000 for partial abatement.

  • Dairy Tax Credit: Increases the statewide cap from $6 million to $8 million, to provide more assistance for local farmers during downturns in milk prices.

  • Student Loan Repayment Exemption: Ensures that employer student loan payments are not treated as taxable compensation.

  • Apprenticeship Tax Credit Reforms: Expands the occupations for which this workforce development credit is available.

  • Cider Tax: Raises the maximum amount of alcohol for these classes of drinks to 8.5%, allowing more locally produced hard cider and still wines to be taxed at a lower rate.

  • Chapter 62F: Requires payments made if Chapter 62F is triggered to be paid out equally amongst taxpayers.

  • Married Taxpayers Filing Jointly: Requires married taxpayers who file a joint return with the federal government to file a joint state return, subject to exemptions or adjustments promulgated by the Department of Revenue.

Click here to access the complete text of the legislation

As always, please do not hesitate to reach out if the Partnership can be of any assistance to you:
Jason Palitsch, Executive Director
(774) 760-0495

Thank you for your continued commitment to strengthening our region.
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