We are committed to keeping you informed about important tax updates that may impact your financial situation. Today, we have some exciting news to share with you. Governor Healey has recently signed into law the first significant tax cuts in Massachusetts in over two decades. This development represents a significant milestone for our state and may have a meaningful impact on your personal and business finances. Here are some key highlights of the tax cuts:
- Child and Family Tax Credit – Eliminates two-dependent cap and increases credit from $180 per dependent child, disabled adult, or senior to $310 for 2023 and to $440 on a permanent basis, starting in 2024. An estimated 565,000 families will benefit, and this will be the most generous universal child and dependent tax credit in the county.
- Earned Income Tax Credit (EITC) – increases credit from 30% to 40% of the federal credit
- Estate Tax – increases threshold from $1 million to $2 million and provides additional credit in certain cases. This is a bit complex, so if you have estate tax planning needs, let me know.
- Short-Term Capital Gains – reduces rate from 12% to 8.5%
- Rental Deduction – increases cap from $3,000 to $4,000
- Senior Circuit Breaker Tax Credit – doubles credit, indexed to inflation, which equates to an increase from $1,200 to $2,400
- Single Sales Factor – This is for business onwers & is a bit complex – contact us if you need more information
- Low-Income Housing Tax Credit (LIHTC) – This is for property developers and is also complex – contact us for more details if interested
- Student Loan Repayment Assistance – exempts employer assistance for student loan repayment from taxable income
- Lead Paint Abatement Credit – doubles credit to $3,000 for full abatement and $1,000 for partial abatement
- Deductible Commuter Transit Benefits – adds public transit fares, RTA fares, and bicycle expenses to deductible commuter expenses
Don’t miss out on this chance to potentially lower your tax liability – contact us today to find out more. I hope this update helped with your planning. We look forward to hearing from you should you need help understanding these.