Governor Deval Patrick's Budget Recommendation - House 1 Fiscal Year 2012

Governor's Budget Recommendation FY 2012

Credits Against Tax

Fiscal Year 2012 Resource Summary (in Millions)
Credits Against Tax 213.6 210.2 223.1

View tax item language

item description amount
Credits Against Tax 223.1
1.601 Renewable Energy Source Credit 1.4
1.602 Credit for Removal of Lead Paint 3.2
1.603 EDIP/Economic Opportunity Area Credit & Enhanced Economic Opportunity Area Credit 3.3
1.604 Credit for Employing Former Full-Employment Program Participants 0.2
1.605 Earned Income Credit 117.7
1.606 Septic System Repair Credit 14.9
1.607 Low Income Housing Tax Credit 1.0
1.608 Brownfields Credit 0.9
1.609 Refundable State Tax Credit Against Property Taxes for Seniors ("Circuit Breaker") 73.8
1.610 Historic Buildings Rehabilitation Credit 2.5
1.611 Film (or Motion Picture) Credit 2.1
1.612 Home Energy-Efficiency Tax Credit Expired
1.613 Medical Device User Fee Credit 0.4
1.614 Dairy Farmer Tax Credit 1.8


IRCFederal Internal Revenue Code (26 U.S.C.)
U.S.C United States Code
M.G.L. Massachusetts General Laws
Rev. Rul.; C.B. Revenue Ruling; Cumulative Bulletin of the U.S. Treasury
ESTIMATES All estimates are in $ millions.


1 1 This item and others citing this endnote cover employee fringe benefits. We accept as standard the following treatment of these benefits: the expense incurred by the employer in providing the benefit is properly deductible as a business expense and the benefit is taxed as compensation to the employee as if the employee had received taxable compensation and then used it to purchase the benefit. Of course, there are problems with this analysis. In some cases, the "benefit" is more a condition of employment than a true benefit. For example, a teacher required to have lunch in the school cafeteria may prefer to eat elsewhere even if the school lunch is free. On the other hand, in many cases the provision of tax-free employee benefits is clearly a substitution for taxable compensation.

2 2 This item and others citing this endnote cover contributory pension plans. The standard tax treatment of these plans is as follows: Component Standard Treatment Contributions: Made out of income that is currently taxed to employees. Investment Income: Taxed to the employee as "earned" income. Distributions from Pension Funds: Tax-free to the extent they are made out of dollars previously taxed to the employees as contributions or investment income. The non-standard treatment of contributions, investment income, or distributions as described in items 1.006, 1.101, 1.104, and 1.402, results in either nontaxation or deferrals of tax.

3 3 FY12 estimates for the basic personal exemptions and the no-tax status discussed in the introduction to the personal income tax are (in millions of dollars): Personal exemption for single taxpayers: $304 Personal exemption for married couples: $540 Personal exemption for married taxpayers filing separately: $14 Dependents exemption: $94 Personal exemption for heads of households: $100 No tax status/Limited income credits: $31 It should be noted that Chapter 186 of the Acts of 2002 reduced personal exemptions for tax year by 25% from their 2001 levels effective in tax year 2002; one-quarter of this reduction was restored effective tax year 2005, with additional one-quarter amounts restored in tax years 2006, 2007, and 2008. These changes in personal exemptions are reflected in the estimates above.

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