Brownfields Credit  

2010 Law Change - An Act Relative to Economic Development Reorganization (St. 2010., c. 240):
The law extended the time for incurring eligible costs that qualified for the credit by extending the environmental response action commencement cut-off date and the dates in which costs could be incurred.

The environmental response and removal costs incurred between August 1, 1998 and January 1, 2014 were eligible for the credit, provided that the taxpayer commences and diligently pursued an environmental response action before the deadline of August 5, 2013. 

2006 Law Change - An Act Relative to Economic Investments in the Commonwealth to Promote Job Creation, Economic Stability, and Competitiveness in the Massachusetts Economy (St. 2006, c. 123):
The law extended the time for incurring eligible costs that qualified for the credit by extending the environmental response action commencement cut-off date and the dates in which costs could be incurred.

The environmental response and removal costs incurred between August 1, 1998 and January 1, 2012, were eligible for the credit, provided that the taxpayer commenced and diligently pursued an environmental response action before the deadline of August 5, 2011. 

2004 Law Change:
The law extended the time for incurring eligible costs that qualified for the credit by extending the environmental response action commencement cut-off date.

The environmental response and removal costs incurred between August 1, 1998 and January 1, 2007, were eligible for the credit provided that the taxpayer commenced and diligently pursued an environmental response action before the deadline of August 5, 2005.

2000 Law Change: 
The law extended the time for incurring eligible costs that qualified for the credit by extending the environmental response action commencement cut-off date and the dates in which costs could be incurred.

The environmental response and removal costs incurred between August 1, 1998 and January 1, 2007, were eligible for the credit provided that the taxpayer commenced and diligently pursued an environmental response action before the deadline of August 5, 2003.

Prior to 2000: 
The environmental response and removal costs incurred between August 1, 1998 and January 1, 2005, were eligible for the credit provided that the taxpayer commenced and diligently pursued an environmental response action before the deadline of August 5, 2001.

The credit was not allowed to taxpayers who received financial assistance from the Brownfields Redevelopment Fund or from the Redevelopment Access to Capital (RAC) Program.


Full Employment Credit (Beginning November, 1995 - 2009) 

An employer who participated in the Full Employment Program and continued to employ a participant for at least one full month after any Full Employment Program subsidy for that participant had expired, was allowed a credit. This credit was only available to taxpayers who, as employers, operated businesses that had employees. Individuals claiming this credit would have in most situations been filing Schedule Cs with wages reports to report business income or loss. For purposes of this credit:
 

  • the amount could not exceed $100 per month of eligible employment per participant, with a maximum credit of $1,200 per participant;
  • the amount was applied either against the corporate excise tax by G.L., c. 63 corporate employers, or against personal Income tax by G.L., c. 62 sole proprietor employers, but not both. i.e., 50% of the credit against corporate excise and 50% against personal income tax was not allowed;
  • an S Corporation could either claim the credit against its corporate liability or pass it through to its shareholders. Whatever choice was made determined how any unused credit carry forwards were taken in subsequent years, i.e., if the initial credit flowed through to the S Corp shareholders, then any unused credit had to be taken by the shareholders.

Limitations on the Credit: 
If the credit was applied against the corporate excise tax, the credit could not be used to reduce the tax liability below the minimum excise which is currently $456.

Carryover of the Credit:
An unused credit could be carried over for up to five succeeding tax years.

Qualified participants and employers are those who participated in the Full Employment Program under the rules of the Department of Transitional Assistance (DTA).


Historic Rehabilitation Credit

2006 Law Change:
Effective June 24, 2006, the Commissioner, in consultation with the Massachusetts Historical Commission, was authorized to allocate credits, for the six-year period beginning January 1, 2006, and ending December 31, 2011 in an amount not to exceed $50,000,000 per year. 

Prior to 2006:
Under prior law, the Massachusetts Historic Rehabilitation Tax Credit was available for the five-year period from January 1, 2005, to December 31, 2009, and the credit was limited to $15,000,000 per year.


Low Income Housing Credit

Prior to August 1, 2010:

Under prior law, the Massachusetts low-income housing tax credits were available only to taxpayers who had been allocated federal low-income housing tax credits.

A taxpayer allocated a federal low-income housing credit for the building or development of low-income housing under § 42 of the Internal Revenue Code may also be eligible for a state credit based on the credit amount allocated to a low-income housing project that the taxpayer owns.


Earned Income Credit - Prior Year Thresholds 

Maximum 2012 Credit

For Single and Head of Household:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA 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 EICMA 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
Maximum 2011 Credit

For Single and Head of Household:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$13,6600$46415%$69.60
$36,0521$3,09415%$464.10
$40,9642$5,11215%$766.80
$43,9983 or more$5,75115%$862.65
For Married Filing Joint:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$18,7400$46415%$69.60
$41,1321$3,09415%$464.10
$46,0442$5,11215%$766.80
$49,0783 or more$5,75115%$862.65
Maximum 2010 Credit

For Single and Head of Household:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$13,4600$45715%$68.55
$35,5351$3,05015%$457.50
$40,3632$5,03615%$755.40
$43,3523 or more$5,66615%$849.90
For Married Filing Joint:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$18,4700$45715%$68.55
$40,5451$3,05015%$457.50
$45,3732$5,03615%$754.20
$48,3623 or more$5,66615%$849.90
Maximum 2009 Credit

For Single and Head of Household: 
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$13,4400$45715%$68.55
$35,4631$3,04315%$456.45
$40,2952$5,02815%$754.20
$43,2793 or more$5,65715%$848.55
For Married Filing Joint:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$18,4400$45715%$68.55
$40,4631$3,04315%$456.45
$45,2952$5,02815%$754.20
$48,2793 or more$5,65715%$848.55
Maximum 2008 Credit

For Single and Head of Household:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$12,8800$43815%$65.70
$33,9951$2,91715%$437.55
$38,6462 or more$4,82415%$723.60
For Married Filing Joint:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$15,8800$43815%$65.70
$36,9951$2,91715%$437.55
$41,6462 or more$4,82415%$723.60
Maximum 2007 Credit

For Single and Head of Household:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$12,5900$42815%$64.20
$33,2411$2,85315%$427.95
$37,7832 or more$4,71615%$707.40
For Married Filing Joint:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$14,5900$42815%$64.20
$35,2411$2,85315%$427.95
$39,7832 or more$4,71615%$707.40
Maximum 2006 Credit

For Single and Head of Household:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$12,1200$41215%$61,80
$32,0011$2,74715%$412.05
$36,3482 or more$4,53615%$680.40
For Married Filing Joint:
Maximum Federal Adjusted Gross IncomeNumber of Qualifying ChildrenMaximum Federal EICMA RateMaximum MA Credit Allowed
$14,1200$41215%$61,80
$34,0011$2,74715%$412.05
$38,3482 or more$4,53615%$680.40

Maximum 2005 Credit:

For Single and Head of Household:

Tax Years 1997 - 2000: 
The earned income credit was 10% of the federal credit allowed under I.R.C. Section 32. 


Same-Sex Joint Filers

Impact of The Federal Defense of Marriage Act (DOMA) – Tax Years Prior to 2013:
The terms "marriage" and "spouse" differed in meaning between Massachusetts and federal law. The Federal Defense of Marriage Act (DOMA) stated that the word "marriage" meant only a legal union between one man and one woman as husband and wife, and the word "spouse" referred only to a person of the opposite sex who was a husband or a wife. Since federal law did not recognize same-sex civil marriage, same-sex spouses remained as individual filers for federal purposes.

Where elements of Massachusetts taxation derived from federal law, such as the definition of gross income, or state deductions based on a federal counterpart, same-sex spouses had to perform special calculations to arrive at the proper Massachusetts tax figure.

Special Calculations to Arrive at the Proper Massachusetts Tax:
Same-sex spouses had to  recalculate their federal EITC credit as though they were joint filers for federal purposes, and derive the Massachusetts credit from the resultant figure. Thus, the credit calculation was not just a simple percentage of the amount filed federally on the taxpayers' individual returns.


Income Tax Paid to Another Jurisdiction

Mandatory Payments – Treatment Prior to Revised Directive, DD 12-1:
Per DOR Directive 77-10, the Commissioner ruled that payments made under the Rhode Island Temporary Disability Insurance Act were not the type of income taxes referred to in G.L. c. 62, § 6(a).


No Tax Status and Limited Income Thresholds:

For Tax year 2007, if Line 7 of the Massachusetts AGI Worksheet was less than the amounts below, then the taxpayer qualified for either NTS or LIC.

2007 No Tax Status Thresholds:  

Filing StatusMaximum NTS AGIAdditional NTS Amount per Dependent
Single$8,000N/A
Head of Household$13,975 +$1,000
Married Filing Jointly$15,850 +$1,000
2007 Limited Income Credit Thresholds:
Filing StatusMaximum LIC AGIAdditional LIC Amount per Dependent
Single$14,000N/A
Head of Household$24,456 +$1,750
Married Filing Jointly$27,738$1,750
For tax year 2006, if Line 7 of the Massachusetts AGI Worksheet was less than the amounts below, then taxpayer qualified for either NTS or LIC.

2006 No Tax Status Thresholds:
Filing StatusMaximum NTS AGIAdditional NTS Amount per Dependent
Single$8,000N/A
Head of Household$13,550 +$1,000
Married Filing Jointly$15,300 +$1,000
2006 Limited Income Credit Thresholds:
Filing StatusMaximum LIC AGIAdditional LIC Amount per Dependent
Single$14,000N/A
Head of Household$23,713 +$1,750
Married Filing Jointly$26,775 +$1,750
For tax year 2005, if Line 7 of the Massachusetts AGI Worksheet was less than the amounts below, then taxpayer qualified for either NTS or LIC.

2005 No Tax Status Thresholds:
Filing StatusMaximum NTS AGIAdditional NTS Amount per Dependent
Single$8,000N/A
Head of Household$13,125 +$1,000
Married Filing Jointly$14,750 +$1,000
2005 Limited Income Credit Thresholds:
Filing StatusMaximum LIC AGIAdditional LIC Amount per Dependent
Single$14,000N/A
Head of Household$22,969 +$1,750
Married Filing Jointly$25,813 +$1,750

For tax years 2000 - 2004, if Line 7 of the Massachusetts AGI Worksheet was less than the amounts below, then taxpayer qualified for either NTS or LIC.

2000 - 2004 No Tax Status Thresholds:

Filing StatusMaximum NTS AGIAdditional NTS Amount per Dependent
Single$8,000N/A
Head of Household$12,700 +$1,000
Married Filing Jointly14,200 +$1,000
2000 - 2004 Limited Income Credit Thresholds:
Filing StatusMaximum LIC AGIAdditional LIC Amount per Dependent
Single$14,000N/A
Head of Household$22,225 +$1,750
Married Filing Jointly$24,850 +$1,750

Real Estate Tax Credit

Prior Year Threshold Amounts:

Calendar YearMaximum CreditTotal Income SingleTotal Income Head of HouseholdTotal Income Married Filing JointAssessed Valuation as of January 1
2012$1,000$53,000$67,000$80,000$705,000
2011$980$52,000$65,000$78,000$729,000
2010$970$51,000$64,000$77,000$764,000
2009$960$51,000$64,000$77,000$788,000
2008$930$49,000$62,000$74,000$793,000
2007$900$48,000$60,000$72,000$772,000
2006$870$46,000$58,000$70,000$684,000
2005$840$45,000$56,000$67,000$600,000
2004$820$44,000$55,000$66,000$441,000
2003$810$43,000$54,000$64,000$432,000
2002$790$42,000$53,000$63,000$425,000
2001$385$41,000$51,000$61,000$412,000

Home Energy Efficiency Credit (Tax Years 2005 and 2006 Only)

Subject to certain limitations, taxpayers and entities that were owners of residential properties located in Massachusetts could claim a credit in the amount of the net expenditures for the purchase and installation of energy-efficient heating items in such properties.

Energy-efficient heating items included:

  • home insulation;
  • new window installation;
  • advanced programmable thermostats;
  • fuel efficient furnaces, boilers, oil, gas, propane, or electric heating systems;
  • solar domestic hot water systems;
  • materials for insulation or sealing of a duct, attic, basement, rim joint or wall;
  • pipe insulation for heating systems; and
  • any energy-efficient item similarly related to heat conservation (as opposed to some other type of energy-efficient items.)

Qualified purchases included:

  • energy-efficient heating items purchased on or after November 1, 2005 but not later than March 31, 2006, and
  • costs related to the installation of such energy-efficient heating items in residential property located in Massachusetts.

Multiple Residence/Ownership Properties:

  • If eligible property was owned by two or more participants, the credit was available to each participant in proportion to its ownership interest in such property. Joint owners of residential property could share any credit claimed for energy-efficient heating items in the same proportion as their ownership interest in the residential property;
  • A taxpayer who owned a condominium or a cooperative dwelling ( i.e., the taxpayer was a stockholder in a cooperative housing corporation) and for whom such purchases were accounted in a common area fee or special assessment against such costs could claim a proportionate share of the expenditure for energy-efficient heating items by such condominium association or cooperative housing corporation as may be reasonably attributed to the taxpayer's proportionate ownership share of the condominium or cooperative dwelling.


Calculation of The Net Expenditure For Energy-Efficient Heating Items:
The total purchase price for qualified purchases plus installation costs had to be reduced by the following amounts:

  • any credits received pursuant to the Internal Revenue Code;
  • any grants or rebates received from the United States Department of Housing and Urban Development; and
  • any rebates or discounts received from an electric utility or gas utility. The resultant amount is the net expenditure for purposes of the credit.


Amount of Credit:
The maximum aggregate amount of the energy-efficiency heating credit that could be claimed by a qualifying taxpayer for the cost of energy efficient heating items was the lesser of:

  • 30% of the net expenditure for the qualifying purchases; or
  • $600 ($1,000 for a multi-unit dwelling).

If a qualifying taxpayer owned more than one residential property located in Massachusetts (multiple single family houses or two multi-unit dwellings), the maximum aggregate amount of the energy-efficiency heating credit that a taxpayer could claim was the lesser of 30% of the net expenditure for the qualifying purchases or $1,000.

Joint owners of a residential property had to share any credit available to the property in the same proportion as their ownership interest.

Carryover of the Credit:
The credit could be taken in taxable year 2005 or 2006, regardless of the exact date on which any qualifying purchases were made. The amount of credit that exceeded the total tax due for the taxable year in which the credit was taken could be carried over, as reduced, and applied against the tax liability for the next taxable year.

  • Personal Income Tax - the amount of the credit claimed may not exceed the taxpayer's personal income tax liability for that year.
  • Corporate Excise - the amount of the credit cannot reduce the corporate excise below the greater of the minimum excise or 50% of the excise before credits.

Limitations on the Credit:
A taxpayer may not sell or transfer the energy-efficiency heating credit to another taxpayer.

  • Personal Income Tax - a taxpayer may not use the same expenses to claim both the Home Energy Efficiency Heating credit and the Solar Wind and Energy Credit (Renewable Energy Source Property);
  • Corporate Excise - a taxpayer may not use the same expenses to claim both the energy-efficiency heating credit and any other credit allowable under chapter 63.

Qualification for Home Energy Efficient Heating Credit was determined by completing the following schedule:

  • for residents, Schedule Z, Line 8 Worksheet - Home Energy Efficiency Credit;
  • for part-year residents and nonresident, Schedule Z, Line 8 Worksheet - Home Energy Efficiency Credit. The amount of energy efficient heating credit allowable was for residential property located in Massachusetts.

Home Energy-Efficient Heating Items - Examples

Examples Include the Purchase of Items as well as Their Installation
 
For purposes of the home energy-efficient heating credit, a manufacturer of an item may certify to a taxpayer that the item is energy-efficient. ENERGY STAR © heating items qualify for the credit. Other items may not have the ENERGY STAR © rating, but will qualify under a different measure of energy efficiency. For example, the energy efficiency of certain items is measured by heating COP (coefficient of performance) or HSPF (heating seasonal performance factor).

The manufacturer's certification statement may be a written copy of the statement with the packaging of the item, in printable form on the manufacturer's website, or in any other manner that will permit the taxpayer to retain the certification statement for tax record keeping purposes. A taxpayer claiming a credit should retain the certification statement as part of his or her records.

Listed below are examples of energy-efficient heating items that qualify for the energy-efficient heating credit. This is not an exclusive list of items that qualify for the credit as energy-efficient heating items.

Boilers That Meet ENERGY STAR © Standards

  • Oil hot water condensing boilers
  • Propane hot water boilers (any fuel)
  • Steam boilers (gas, oil, propane)

Furnaces That Meet ENERGY STAR © Standards

  • Gas and propane furnaces
  • Oil-fired furnaces

Heat Pumps (heating systems that do not have ENERGY STAR © standards)

  • Air source heat pumps (gas) with a heating COP of at least 1.2
  • Air source heat pumps (electric) with an HSPF of at least 7.6
  • Ground source heat pumps with a heating COP of at least 3.3

Water Heaters

  • Free-standing storage heaters fueled by oil, gas, propane with an energy factor (EF) of at least 0.61
  • Free-standing storage heaters fueled by electricity with an EF of at least 0.92
  • Heat pump water heaters with an EF of at least 2.0
  • Indirect-fired water heaters that are UL approved (often installed as part of heating system replacements)
  • Instant or demand water heaters that do not store hot water in between uses
  • Solar domestic water heaters

Thermostats That Are Advanced Programmable

  • ENERGY STAR ©-rated thermostats

Home Insulation/Materials for Insulation

  • Air sealing to eliminate internal and external unintended air movements
  • Insulation for attics, walls, basement, band joists and crawl spaces
  • Sealing of a duct, attic, basement, rim joint or wall

Window Installation

  • Replacement of single-pane windows with ENERGY STAR © windows
  • Asbestos removal necessary for a heating system to be replaced

A taxpayer may not use the same expenses to claim both the Solar Wind and Energy Credit (Renewable Energy Source Property and the Home Energy Efficiency Heating credit.


Home Energy Efficiency Heating Credit Carryover to 2007

For tax year 2007, the home energy efficiency credit is limited only to the amount of the credit that exceeded the 2006 tax. Taxpayers who did not take the credit in 2006 or who did not have an excess amount of the credit remaining from 2005 that was not taken in 2006 are not eligible for any credit in 2007.

Qualification for Home Energy Efficient Heating Credit Carryover is determined by completing the following schedules:

  • for residents, Schedule Z, Line 8 Worksheet - Home Energy Efficient Credit;
  • for part-year residents and nonresidents, Schedule Z, Line 8 Worksheet - Home Energy Efficient Credit. The amount of the home heating fuel credit allowable is for residential property located in Massachusetts.

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

Full Employment Credit

  • Taxpayer Completed and enclosed Schedule FEC and entered the amount of credit allowed on either Mass Form 1 or 1-NR/PY, Schedule Z, Part 1, Line 3.

Massachusetts References:

Home Energy Credit

Income Tax Paid to Another Jurisdiction

Limited Income Credit

Real Estate Tax Credit