How the New Massachusetts Tax Cut Bill Affects You: A Guide for Parents, Renters, and Seniors
Hold onto your seats, because Massachusetts politicians have just delivered a tax package that’s brimming with opportunities to keep more cash in your pockets. After intense back-and-forths, top Democrats in the State House finally pulled the curtain back on an exciting $1 billion compromise tax package. The buzz is real: this bill is hotly tipped to sail smoothly through both the House and Senate, landing on Governor Maura Healey’s desk faster than you can say “tax relief.”
Curious about how this fiscal wizardry will impact your bank account? Trust us, you’ll want to read on. This isn’t just a one-size-fits-all deal; there’s a smorgasbord of benefits, tailored to fit diverse needs. So, let’s get into the meat and potatoes of some of the juiciest provisions:
Bonanza for Parents and Caregivers: Here’s something for parents that’s more exciting than a Saturday night free from babysitting duties. The existing policy in the Bay State allows parents and guardians to claim a tax credit of up to $240 for each child under 13, as well as for dependents over 65 or those who are disabled. Fasten your seat belts: starting from the 2023 tax year, that credit is ramping up to $310 per dependent and rocketing to $440 from the 2024 tax year onward.
What does this mean for you? Well, if you’re already squeezing every drop out of the current credit, you’re looking at an extra $200 in your pocket per child. But that’s not all! The bill tosses the old cap of two qualifying dependents straight into the recycling bin. So for big families, think of it as an annual bonus. A family with four kids could be rolling in an additional $1,280 a year starting in 2024!
A Helping Hand for Lower-Income Residents: For the hardworking residents on the lower end of the income scale, the state’s Earned Income Tax Credit (EITC) is climbing from 30% to a generous 40% of the federal EITC. The total benefit varies based on your individual circumstances. A single person with no kids making the maximum qualifying amount of $16,480 could see an extra $56 a year. But a family with two kids maxing out at $49,399? You’re in for over $600 in annual savings!
A Boost for Seniors: Seniors, this one’s for you! If you’re 65 or older with a lower income, you’re currently eligible for a $1,200 tax credit. Guess what? That amount is about to double to a whopping $2,400! Income caps apply, but if you make the cut, that’s an extra $1,200 lining your pockets every year.
More Savings for Renters: If you’re paying rent in Massachusetts, particularly in the pricey Boston area, you’ll appreciate this tidbit. The state allows renters to write off 50% of their rent on their taxes each year, up to $3,000. This bill nudges that limit up to $4,000. For anyone spending over $8,000 on annual rent, that means an extra $50 you don’t have to part with each year.
So there you have it, a rundown of the financial feast that’s about to grace the state of Massachusetts. Whether you’re a parent, senior, renter, or just someone looking to stretch a dollar, this bill has something to make you smile. Keep an eye on its progress—it’s one you won’t want to miss!
