New guidance on business taxes affected by the June supplemental budget

We updated our state tax filing guidance, including the 2025 tax year instructions, to reflect tax changes in the supplemental budget signed by Gov. Maura Healey in June. 

Most Massachusetts taxpayers will not be affected, as the updates primarily concern business taxes. They include a phase-in of conformity to certain provisions in Public Law No. 119-21, also known as the "One Big Beautiful Bill Act," related to business expenses and depreciation, and a new election for eligible pass-through entities (PTEs) that pay the PTE excise to pay an additional 4% tax on the share of income that exceeds the threshold for the 4% surtax. 

The June supplemental budget provided relief from penalties and interest for certain taxpayers affected by Massachusetts’ phased-in adoption of certain provisions in Public Law No. 119-21, also known as the “One Big Beautiful Bill Act.” To qualify, taxpayers had to have filed amended returns and paid any taxes owed by September 10, 2026. The Administration has introduced legislation to extend this deadline. In the meantime, we have been directed to suspend penalties and interest for affected taxpayers. 

See the updated instructions: 

• 2025 Massachusetts Personal Income Tax Forms and Instructions
• 2025 Massachusetts Corporate Excise Tax Forms and Instructions 
• 2025 MA Fiduciary and Partnership Tax Forms and Instructions 
• 2025 Massachusetts Personal Income Tax Forms and Instructions 
• 2025 Massachusetts Corporate Excise Tax Forms and Instructions  
• 2025 MA Fiduciary and Partnership Tax Forms and Instructions  

If you are submitting your 2025 tax return or amended returns for 2022-2025 to align with the changes and are requesting relief from interest and penalties, you must attach a Taxpayer Disclosure Statement (Schedule TDS) with the statement: "Taxpayer is applying for relief related to Massachusetts conformity with federal law P.L. 119-21." The schedule must also identify the specific Internal Revenue Code provisions involved and explain how the adjustments were calculated.  

You must request estimated penalty relief by attaching a completed Schedule M-2210 or M-2220.  

Contact us with questions about penalty and interest relief for taxpayers affected by the Supplemental Budget, including inquiries about payment agreements: 

• Phone: (617) 887-6367 
• MassTaxConnect Message 

See further guidance: 

• Working Draft TIR: Tax Provisions in the Fiscal Year 2026 Final Mid-Year Supplemental Appropriation Bill | Mass.gov 

• TIR 26-4: Massachusetts Conformity to Certain Provisions in Public Law No. 119-21

• Differences Between MA and Federal Tax Law for Personal Income

• Differences Between MA State and Federal Tax Law for Corporate Excise

• Amend a Massachusetts Individual or Business Tax Return