Below you will find brief descriptions of major tax law changes for 2015 pertaining to personal income tax in Massachusetts. Each topic includes links to further detailed information.

Below you will find brief descriptions of federal tax law changes for 2015 that do not pertain to personal income tax in Massachusetts. Each topic includes links to further detailed information.


Certified Housing Development Tax Credit

Pursuant to the Act Promoting Economic Growth across the Commonwealth, (St. 2014, c. 287), Sections  45 - 48, 60 - 62, 122 and 125, effective for tax years beginning on or after January 1, 2015, the annual cap on the amount of credit that may be awarded has been increased from $5 million to $10 million. The annual cap for the certified housing development tax credit is part of an over-all cap imposed on the Economic Development Incentive Program credit authorized pursuant to G.L. c. 62, 6(g); G.L. c. 63, 38N.  The annual cap is reduced from $10 million back to $5 million for tax years beginning on or after January 1, 2019. For more information, see:
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Economic Development Incentive Program Credit (EDIPC)

Pursuant to the Act Promoting Economic Growth across the Commonwealth, (St. 2014, c. 287), Sections 41 and 55,  effective for tax years beginning on or after January 1, 2015, the EDIP credit provisions have been expanded to include “certified job creation projects.” The amount of the credit awarded may be up to $1,000 per job created (up to $5,000 in a Gateway Community or within a city or town whose average seasonally adjusted unemployment rate, as reported by the executive office of labor and workforce development, is higher than the average seasonally adjusted unemployment rate of the commonwealth. The total award per project may not exceed $1,000,000.  The credit for a certified job creation project is allowed only for the year subsequent to that in which the jobs are created.  For more information, see:
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Farming and Fisheries Tax Credit

The Act Promoting Economic Growth across the Commonwealth, (St. 2014, c. 287), Section 50, creates a small farms and fisheries tax credit effective for tax years beginning on or after January 1, 2015. The new credit applies to personal income taxpayers who are primarily engaged in agriculture, farming or commercial fishing. The amount of the credit is 3% of the cost or other basis for federal income tax purposes of qualifying property acquired, constructed or erected during the tax year.  Qualifying property is defined as tangible personal property and other tangible property including buildings and structural components thereof which are located in Massachusetts, used solely in farming, agriculture or fishing, and are depreciable with a useful life of at least 4 years.  The Act allows the same credit to lessees, and there is a recapture provision.  For more information, see:
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Filing Due Date for 2015 Income Tax Returns

Form 1, Form 1NR/PY and extensions are due on or before April 19, 2016.


Gambling Loss Deduction

For tax years beginning on or after January 1, 2015, G.L. c. 62, § 3(B)(a)(18) allows a deduction  from Part B income for gambling losses incurred at certain Massachusetts licensed (under General Laws chapter 23K) gaming establishments or “racing meeting licensee or simulcasting licensee” establishments but only to the extent of winnings from such Massachusetts establishments included in gross income for the calendar year. This deduction is claimed on Schedule Y.

The new gambling loss deduction is the only deduction for gambling losses allowed a Massachusetts taxpayer. Massachusetts does not adopt the federal deduction under IRC § 165(d) for gambling losses. For more information, see:
TIR 15-14
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Health Insurance, Penalty for Failure to Purchase - Tax Year 2015

Pursuant to G.L. c. 111M, s. 2, the Massachusetts Health Care Reform Act requires most adults 18 and over with access to affordable health insurance to obtain it. In 2015, individuals must be enrolled in health insurance policies that meet minimum creditable coverage standards defined in regulations adopted by the Commonwealth Health Insurance Connector Authority (the Health Connector). Individuals who are deemed able to afford health insurance but fail to comply are subject to penalties for each month of non-compliance in the tax year (provided that there is no penalty in the case of a lapse in coverage of 63 consecutive days or less). The penalties, which will be imposed through the individual's personal income tax return, shall not exceed 50% of the minimum monthly insurance premium for which an individual would have qualified through the Connector.

These penalties apply only to adults who are deemed able to afford health insurance. On an annual basis, the Health Connector establishes separate standards that determine whether individuals, married couples and families can afford health insurance, based on their incomes and affordable health insurance premiums. Those who are not deemed able to afford health insurance pursuant to these standards will not be penalized. Individuals also have the opportunity to file appeals with the Connector asserting that hardship prevented them from purchasing health insurance (and thus that they should not be subject to tax penalties). For more information, see: 
830 CMR 111M.2.1
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Historic Rehabilitation Credit

The Fiscal year 2015 Budget extends the Massachusetts Historic Rehabilitation Tax Credit, including the $50 million annual limit, for an additional five years from December 31, 2017 to December 31, 2022.

The Act Promoting Economic Growth across the Commonwealth, (St. 2014, c. 287), Section 53 amends  MGL, Chapter 62, Section 6J(b)(1)(i), which provides that a taxpayer who acquires a qualified historic structure is allowed to receive any tax credits for qualified rehabilitation expenditures previously awarded to the transferor of the qualified historic structure if certain criteria is met:  (A) the rehabilitation was not placed in service by the transferor; (B) no credit has been claimed by anyone other than the acquiring taxpayer as verified by the Department of Revenue to the Historical Commission; (C) the taxpayer completes the rehabilitation and obtains certification from the Historical Commission; and, (D) the taxpayer complies with all other requirements under the Historic Rehabilitation Tax Credit statute and related regulations and rules.  In the case of a multi-phase project, tax credits may be transferred for any phase that meets the criteria in subsections (A) through (D).  This change is effective August 13, 2014. For more information, see:
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Real Estate Tax Credit for Persons Age 65 and Older (Circuit Breaker)

Certain taxpayers age 65 or older may be eligible to claim a refundable credit on their state income taxes for the real estate taxes or rent paid during the tax year on the residential property they own or rent in Massachusetts that is used as their principal residence. If the credit due the taxpayer exceeds the amount of the total income tax payable for the year by the taxpayer, the excess amount of the credit will be refunded to the taxpayer without interest. For tax year 2015, the maximum credit allowed for both renters and homeowners is $1,070.

To be eligible for the credit for the 2015 tax year: the taxpayer or spouse, if married filing jointly, must be 65 years of age or older at the close of the 2015 tax year; the taxpayer must own or rent residential property in Massachusetts and occupy the property as his or her principal residence; the taxpayer's "total income" cannot exceed $57,000 for a single filer who is not the head of a household, $71,000 for a head of household, or $85,000 for taxpayers filing jointly; and for homeowners, the assessed valuation as of January 1, 2015, before residential exemptions but after abatements, of the homeowner's personal residence cannot exceed  $693,000. For more information, see:
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Tax Rates

M.G.L. Chapter 62, Section 4, establishes the personal income tax rates to be applied against different classes of Massachusetts taxable income. The tax rate on most classes of income is scheduled to decrease in years where the state achieves revenue growth benchmarks set forth by the formula in M.G.L. Chapter 62, Section 4(b).

Accordingly, effective for tax years beginning on or after January 1, 2015, the 5.2% tax rate on most classes of taxable income is decreased to 5.15%. The tax rate on short-term gains from the sale or exchange of capital assets and on long-term gains from the sale or exchange of collectibles (after a 50% deduction) remains at 12%. For more information, see:
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Major Federal Tax Law Changes for 2015 That Do Not Pertain to Personal Income Tax in Massachusetts

Below you will find brief descriptions of federal tax law changes for 2015 that do not pertain to personal income tax in Massachusetts. Each topic includes links to further detailed information.

Transportation Fringe Benefits

Based on IRS's Revenue Procedure/inflation adjustment formula, the Massachusetts exclusion amount for tax year 2015 is $250 per month for employer-provided parking and $130 per month for combined transit pass and commuter highway vehicle transportation benefits.

Massachusetts adopts this federal exclusion under the Internal Revenue Code, as amended and in effect on January 1, 2005. Any federal tax law changes to these exclusions will not be automatically adopted. Massachusetts will continue to follow the Code of January 1, 2005. Massachusetts does, however, adopt the IRS's Revenue Procedure/inflation adjustment formula used in determining annual exclusion amounts. For more information, see:
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