General Rules

A refundable earned income credit is available to certain low-income individuals who have earned income and meet certain federal requirements for the federal earned income credit. Taxpayers must qualify for and claim the federal earned income credit allowed under I.R.C. § 32 as amended and in effect for the taxable year. Taxpayers may claim the credit even though they neither owe any taxes nor have any income taxes withheld from their pay. To receive the credit, taxpayers must file tax returns and claim the credit. The Massachusetts refundable credit is 15% of the computed federal credit.

The American Taxpayer Relief Act (P.L. 112-240):
For federal income tax purposes, this legislation makes permanent or extends through 2017 enhancements to the earned income tax credit. The Massachusetts earned income tax credit equals 15% of the federal earned income tax credit received by the taxpayer for the taxable year. Therefore, Massachusetts allows 15% of the amount  the taxpayer receives federally under I.R.C. § 32.

The Tax Relief Act of 2010 (P.L. 111-132):
For federal income tax purposes, this legislation extends the enhanced EITC credit for two years, through December 31, 2012. The Massachusetts earned income tax credit equals 15% of the federal earned income tax credit received by the taxpayer for the taxable year. Therefore, Massachusetts allows 15% of the amount the taxpayer receives federally under I.R.C. § 32.

The American Recovery and Reinvestment Act of 2009 (P.L. 111-5 or "ARRA"):
For federal income tax purposes, the ARRA amends I.R.C. § 32 to increase the earned income tax credit percentage for families with three or more qualifying children to 45% for 2009 and 2010. The ARRA also increases the threshold phase-out amounts for married couples filing joint returns to $5,000 above the threshold phase-out amounts for singles, surviving spouses, and heads of household for 2009 and 2010. The Massachusetts earned income tax credit equals 15 % of the federal earned income tax credit received by the taxpayer for the taxable year. Therefore, Massachusetts allows 15% of whatever the taxpayer receives federally under IRC sec. 32. The effect is that Massachusetts will allow a larger credit for 2009 and 2010 due to the ARRA and its increases to the federal earned income tax credit for those years.

The IRS provides DOR with its Earned Income Credit table showing maximum federal adjusted gross income, number of qualifying children and maximum EITC. The IRS credit is based on federal modified adjusted gross income; the DOR credit is based on the Federal credit.

Married filing separate
taxpayers do not qualify for EITC.

Eligible Taxpayers:

  • any taxpayer who has a qualifying child for the taxable year; or
  • any other taxpayer who does not have a qualifying child for the taxable year if all of the following criteria are met:
  1. the taxpayer lived in the United States for more than one half of the taxable year;
  2. the taxpayer or the taxpayer's spouse has attained age 25 but not attained age 65 before the close of taxable year; and
  3. the taxpayer is not a dependent of another taxpayer during the taxable year.

Investment Income:
An individual is not eligible for the earned income credit if he or she has "investment income" exceeding certain thresholds. Investment income includes capital gain net income, net passive income, interest, dividends, tax exempt interest and non-business rents and royalties. (See U.S. Publication 596, 2002) For 2013, investment income must be $3,300 or less for the year.

Federal Computation of Earned Income Tax Credit:

  • If the IRS computes the EITC for eligible taxpayers who did not take the credit on their Massachusetts returns, they can file Massachusetts Form 1 or 1 NR/PY to receive 15% of the federal credit. Taxpayers who did take the credit but need to amend for an increase or decrease based on an IRS adjustment should file Massachusetts Form CA-6.

Maximum 2013 Credit

For Single and Head of Household:

Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EITCMA RateMaximum MA Credit Allowed
$14,3400$48715%$73.05
$37,8701$3,25015%$487.50
$43,0382$5,37215%$805.80
$46,2273 or more$6,04415%$906.60
For Married Filing Joint:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EITCMA RateMaximum MA Credit Allowed
$19,6800$48715%$73.05
$43,2101$3,25015%$487.50
$48,3782$5,37215%$805.80
$51,5673 or more$6,04415%$906.60

Nonresidents and Part Year Residents 

  • Part-year residents must have Massachusetts source income in order to claim the Massachusetts EITC. The credit is limited to 15 percent of the federal credit multiplied by a fraction; the numerator of which is  the number of days a Massachusetts resident and the denominator of which is 365 days.
  • For nonresidents: Nonresidents must have Massachusetts source income in order to claim the Massachusetts EITC, and the credit applies only with respect to that portion of Massachusetts source income that is earned income. The credit is limited to 15 percent of the federal credit multiplied by a fraction; the numerator of which is the earned income of the nonresident derived from sources from within Massachusetts and the denominator of which is the earned income of the nonresident from all sources, as if the taxpayer were a full year Massachusetts resident.

Where to Report on Original Tax Return; What to Enclose:

  • Enter the number of qualifying children, if any, in the box on either Mass Form 1, Line 40a or Form 1-NR/PY, Line 45a, and in the box next to Line 40a or 45a, enter the amount reported on either U.S. Form 1040, Line 64a, U.S. Form 1040A, Line 41a, or U.S. Form 1040EZ, Line 9a. Multiply the U.S. amount by .15 and enter the result in Form 1, Line 40 or Form 1-NR/PY, Line 45.
  • Part-year residents must multiply the amount by Form 1-NR/PY, Line 2, Total days as Massachusetts resident, since this deduction must be prorated based upon the number of days a taxpayer is a Massachusetts resident. Enter the result on Mass Form 1-NR/PY, Line 45.
  • Nonresidents must then multiply the amount by Mass Form 1-NR/PY, Line 14g, Nonresident Deduction and Exemption Ratio, since this deduction must be prorated based upon the amount of the taxpayer's Massachusetts source income to his/her total income. Enter the result on Mass Form 1-NR/PY, Line 45.

Documentation to Submit with Abatement/Amended Tax Return:

  • Social Security numbers for yourself, your spouse and any qualifying children;
  • Copy of U.S. Schedule EITC - Earned Income Tax Credit (Qualifying Child Information).

Massachusetts References:

Federal References:

  • I.R.C. Section 32
  • The Federal American Recovery and Reinvestment Act of 2009 (P.L. 111-5 or "ARRA")
  • Revenue Procedure 2007-66
  • U.S. Publication 596

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