2024 Massachusetts Tax Cut Package Implemented: How You Can Benefit

The Massachusetts Tax Relief Package is now in effect, providing hundreds of millions of dollars worth of relief to residents. This tax relief package includes an expansion of the child and family tax credit, an increase in the rental deduction and senior citizen circuit breaker tax credit, and a reduction in the estate tax.

Expanding the Child and Dependent Care Tax Credit

Last October, Gov. Maura Healey signed a $1 billion tax cut package to benefit renters, caregivers and seniors. The bill went into effect as the calendar officially turned to 2024, and eligible residents will be able to apply for it in the coming weeks and months.

“This tax package makes long-overdue changes that will allow Massachusetts to better compete with other states, while also providing savings to those who need it most,” Governor Healey said in signing the bill.

The Massachusetts tax cut package offers several benefits, but one of its most important provisions is an expansion of the child and dependent tax credit. The bill would increase the credit amount for dependent children, disabled adults or seniors from $180 to $310 for tax year 2023 and to $440 for 2024 and beyond.

The bill also eliminates the child/dependent limit. The expanded credit will benefit more than 565,000 families, making it the most generous child and dependent tax credit in the country.

In addition to the tax relief, the bill would require payments to be equalized across taxpayers once Chapter 62F is triggered. The Massachusetts tax cut package is estimated to cost $561 million this year and more than $1 billion starting in 2027.

Massachusetts Tax Relief Package: What else does it offer?

For renters, the new law increases the limit on what can be deducted from rent payments. Previously, the limit was half the amount of rent paid during the year or $3,000, whichever was lower, but the new law increases this limit to $4,000.

For low- and moderate-income seniors who rent or own a home, the new law doubles the deduction amount. Previously, the tax credit for individual seniors earning less than $80,000 (couples earning less than $96,000) was $1,200. The new bill doubles the credit to $2,400.

The Massachusetts tax relief package would increase the Earned Income Tax Credit (EITC) from 30% to 40% of the federal credit for people earning less than $60,000. This increase will benefit nearly 400,000 low-income working individuals and families.

The tax relief package also expands coverage of deductible commuting expenses. Previously, only commuters who paid tolls or purchased an MBTA pass could be charged. Deductible commuting expenses now include all public transit fares, bicycle commuting costs, ferries, and local transit passes.

Massachusetts’ tax relief package would also reduce the estate tax for all taxpayers as well as eliminate the tax on all estates under $2 million by authorizing a flat deduction of $99,600.

In addition to this, the Massachusetts tax relief package offers several more benefits. To learn more about tax relief packages, visit this link.