Healey Signs $1 Billion Tax Relief Bill

Attorney General Maura Healey

HYANNIS – Gov. Maura Healey has signed a $1 billion tax relief bill—with the first cuts in 20 years.

She says it will make the state more competitive for families, particularly with a reduction to estate tax, and the nation’s new largest child and dependent tax credit of $310 for 2023, and then $440 for 2024 onwards.

The senior circuit breaker credit maximum will also be doubled from $1,200 to $2,400, helping older residents stay in their homes, says Healey.

The following is the full statement from the office of Gov. Healey:

Governor Maura T. Healey today signed into law Massachusetts’ first tax cuts in more than 20 years. The $1 billion package includes key proposals that Governor Healey has long championed and introduced in her tax cuts proposal in March, including an expanded Child and Family Tax Credit that is now the most generous in the country, increases to the Rental Deduction, Senior Circuit Breaker Tax Credit, and Housing Development Incentive Program (HDIP), and changes to the Estate Tax and Short Term Capital Gains to address areas of the tax code where Massachusetts is an outlier.

Governor Healey also announced that she is launching a Cutting Taxes, Saving You Money tour in communities across the state to raise awareness about the relief coming for families, renters, seniors and businesses. The tour kicks off on Thursday with visits to Gardner and Haverhill to celebrate the savings coming for families and children.

“We are thrilled to deliver on our promise to pass tax cuts that will result in real savings for the people of Massachusetts, including the country’s largest child and family tax credit that will go back in the pockets of parents and caregivers. Everywhere we go, we hear about how people are struggling to keep up with the rising cost of living. This tax package delivers savings for those who need it most, while making long overdue changes that will better allow Massachusetts to compete with other states,” said Governor Healey. “We’re grateful for the partnership of Speaker Mariano, Senate President Spilka and the Legislature for seeing this through and securing the state’s first tax cuts in more than 20 years.”

“These tax cuts translate to real money back in the pockets of the people of Massachusetts every single year,” said Lieutenant Governor Driscoll. “Families, seniors, renters, businesses and commuters will see hundreds of dollars in savings each year. Governor Healey and I look forward to spreading the word across the state that savings are here for the people of Massachusetts.”

“This tax relief package strikes the critically important balance of providing permanent financial relief to residents and businesses across Massachusetts, without compromising the long-term financial security of the Commonwealth,” said Speaker of the House Ronald J. Mariano (D-Quincy). “I’m confident that this tax reform legislation will help to make Massachusetts more affordable for all residents, while also helping to make the Commonwealth more competitive with other states. I want to thank Chairman Michlewitz, the members of the conference committee and my colleagues in the House, as well as the Governor Healey and her entire Administration, along with Senate President Spilka and our partners in the Senate, for working diligently to get this done.”

“When Massachusetts’ middle-class families succeed, we all succeed—and that is exactly what this tax relief bill will help us do,” said Senate President Karen E. Spilka (D-Ashland). “This legislation answers the calls that we have heard from people around the state, saying that their costs are rising, they cannot find housing, and it’s becoming hard to operate a business. It puts real dollars back into the bank accounts of working families, relieves financial strains for our young professionals, puts meaningful incentives into developing affordable housing, and will keep our state competitive for businesses who will invest in our workforce. I’m deeply grateful to the Governor for signing this legislation into law, to Chair Rodrigues and the Senate for their tireless work and support, and to Speaker Mariano and our colleagues in the House.”

Provisions of the tax cuts package include:

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 with a credit that mitigates cliff effect

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 – shifts from three-factor apportionment system based on business’s share of sales, payroll, and property to apportionment based solely on sales

Low-Income Housing Tax Credit (LIHTC) – increases annual program cap from $40 million to $60 million

Housing Development Incentive Program (HDIP) – increases annual program cap from $10 million to $57 million in 2023, and thereafter to $30 million annually

Student Loan Repayment Assistance – exempts employer assistance for student loan repayment from taxable income

Dairy Tax Credit – increases annual program cap from $6 million to $8 million

Cider Tax Rate – applies lower tax rates to a broadened class of beverages

Lead Paint Abatement Credit – doubles credit to $3,000 for full abatement and $1,000 for partial abatement

Title V (Septic) Tax Credit – triples maximum credit to $18,000, increases percentage of eligible expenses from 40% to 60%; and allows taxpayers to claim up to $4,000 in any year, versus $1,500 in current law

Deductible Commuter Transit Benefits – adds public transit fares, RTA fares and bicycle expenses to deductible commuter expenses

Apprenticeship Tax Credit – expands eligible occupations

Municipal Affordable Housing Property Tax Exemption – permits municipalities to adopt local property tax exemption for affordable real estate

Property Tax Liability Reduction for Senior Volunteer Services – permits municipalities to increase the maximum property tax abatement available to seniors who perform volunteer services from $1,500 to $2,000

Stabilization Fund Cap – increases the cap on Stabilization Fund deposit from 15% to 25.5% of budgeted revenues.

‘Cutting Taxes, Saving You Money’ Statewide Tour

In the weeks ahead, Governor Healey and Lieutenant Governor Driscoll will be visiting communities across the state to make sure Massachusetts residents know that savings are coming their way. On Thursday, they will be visiting Gardner and Haverhill to celebrate tax cuts for children and families. Additional visits will be announced in the near future to celebrate relief for seniors, businesses, residents, and more.