Many Massachusetts taxpayers will soon be receiving refund checks thanks to MGL Chapter 62F, the law that requires the Commonwealth Department of Revenue to issue a credit if total tax revenues in a given fiscal year exceed an annual cap tied to wage and salary growth. Enacted by voters in 1986 via a ballot question, the Chapter 62F process has been triggered once before, in 1987.

For fiscal year 2022, total state tax revenue collected was $41,812,654,358, which exceeded the allowable revenue threshold as defined by Chapter 62F ($38,871,154,627) by a total of $2,941,499,731. Under the statute, this excess must be returned to taxpayers. Anyone who paid personal income taxes in Massachusetts in the 2021 tax year and files a 2021 state tax return on or before October 17, 2022, is eligible to receive a refund, the amount of which is in proportion to the personal income tax liability incurred in the immediately preceding taxable year.

While the final refund amounts will not be announced until late October, the state Department of Revenue estimates the refunds will equal approximately 13% of taxes paid (after credits including the pass-through entity tax credit), subject to offsets, including for unpaid tax liability, unpaid child support, and certain other debts. Checks or direct deposit of the refunds should be available in November.

More information, including a calculator to estimate the refund amount you may be eligible to receive, is available at the Commonwealth of Massachusetts website.

For additional information on this or other tax topics, please contact Gray, Gray & Gray at (781) 407-0300.