Governor Deval Patrick's Budget Recommendation - House 2 Fiscal Year 2015

Deductions from Adjusted Gross Income

Fiscal Year 2015 Resource Summary (in Millions)
TAX EXPENDITURE FY2011 FY2012 FY2013 FY2014 FY2015
Deductions from Adjusted Gross Income 792.2 793.0 810.1 828.8 849.3

View tax item language

item description amount
Deductions from Adjusted Gross Income 849.3
1.401 Deduction for Employee Social Security and Railroad Retirement Payments 288.5
1.402 Deduction for Employee Contributions to Public Pension Plans 2 included in 1.401
1.403 Additional Exemption for the Elderly 28.8
1.404 Additional Exemption for the Blind 1.2
1.405 Dependents Exemption Where the Child Earns Income 3 N.A.
1.406 Deduction for Dependents Under 12 134.4
1.407 Personal Exemption for Students Age 19 or Over 8.9
1.408 Deduction for Adoption Fees 0.4
1.409 Deduction for Business-Related Child Care Expenses 17.3
1.410 Exemption of Medical Expenses 92.4
1.411 Rent Deduction 123.7
1.412 Nontaxation of Charitable Purpose Income of Trustees, Executors or Administrators N.A.
1.413 Exemption of Interest on Savings in Massachusetts Banks 3.5
1.414 Tuition Deduction (Over 25% of Income) 44.7
1.415 Charitable Contributions Tax Deduction N.A.
1.418 Deduction for Costs Involved in Unlawful Discrimination Suits N.A.
1.419 Business Expenses of National Guard and Reserve Members Negligible
1.420 Archer Medical Savings Accounts Negligible
1.421 Deduction for Clean-Fuel Vehicles and Certain Refueling Property Negligible
1.422 Health Savings Accounts 13.3
1.423 Commuter Deduction 7.6
1.424 Self-Employed Health Insurance Deduction 51.0
1.425 Student Loan Interest Deduction (allowed Federally or by Massachusetts) 33.0
1.426 Expenses of Human Organ Transplant 0.5


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 FY15 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: $314 Personal exemption for married couples: $556 Personal exemption for married taxpayers filing separately: $16 Dependents exemption: $92 Personal exemption for heads of households: $102 Limited income credits: $15 No tax status: $18

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