DOR Hot Topics for Tax Professionals

Follow news from DOR that’s both current and important to Massachusetts taxpayers and tax practitioners.

Updated: February 9, 2024

Table of Contents

3/11/2024: Important Tax Filing Season Reminders

Taxpayers who receive a Form 1099-G for unemployment benefits they did not receive should notify the Department of Unemployment Assistance (DUA) immediately. After review, DUA will issue a corrected Form 1099-G. Taxpayers should keep copies of all Forms 1099-G received with their tax records. Taxpayers should then contact DOR by secure message through MassTaxConnect and attach  supporting documentation. If you don’t have a MassTaxConnect account, learn how to set one up. The taxpayer should not report unemployment income not received on their tax return, despite receiving the incorrect 1099-G.

A taxpayer may receive a Request for Verification after filing their tax return. To move the process along, a quick, online response is recommended. Go to MassTaxConnect and choose Submit Documentation. You’ll find more information here.

2/9/24: UPDATE: AGI calculation for No Tax Status, Limited Income Credit, and other schedule changes

When determining whether a taxpayer qualifies for No Tax Status and Limited Income Credit, Massachusetts adjusted gross income should not be reduced by the deductions for:

  • Massachusetts charitable contributions,
  • Prepaid tuition or college savings plan contributions, and/or
  • Qualifying employer-provided student loan repayment assistance.

These deductions are claimed on Schedule Y, lines 9c, 18a, and 18b, for purposes of calculating Massachusetts taxable income. This is also true when calculating Massachusetts adjusted gross income for the senior circuit breaker credit and when determining excess deductions against trade or business income.

DOR has updated the following with the correct information:

  • Form 1 Instructions
  • Schedule NTS-L-NR/PY
  • Schedule CB Instructions
  • Schedule C-2

 We will communicate this update to third-party vendors.

10/27/23: DOR Guidance on Disaster Relief

The IRS granted relief for all Massachusetts taxpayers affected by Hurricane Lee. The tax relief postpones certain tax filing and payment deadlines that began Sept. 15, 2023, until Feb. 15, 2024. DOR provides guidance in TIR 08-19 for Massachusetts taxpayers on automatic extensions of time for "affected taxpayers" to file returns and submit payments of tax as the result of any disaster declaration. Specific relief guidelines will align with IRS relief for personal income taxpayers subject to chapter 62. For all other impacted taxpayers, please contact DOR at 617-881-6367 to see if you qualify for late file and/or late pay penalty relief.

4/13/23: Name Mismatch on Returns

We’ve noticed that some taxpayers and practitioners are not entering a taxpayer’s full first name on their personal income tax return. We urge you to include a taxpayer’s full legal name on the return – failure to do so will result in a delay in processing.

4/13/23: Test Your MassTaxConnect Credentials Before Due Dates

To make things smooth for paying online or conducting business on MassTaxConnect, business taxpayers and tax professionals should test their passwords and other MassTaxConnect login credentials in advance of major deadlines. For example, you may need a Notice of Account ID to create a username or password, or you may need to reset your password. It’s a great way to avoid phone queues on deadline day.

3/24/23: FILLABLE! Power of Attorney Form

The Power of Attorney form, M-2848, is now fillable. DOR’s webpage POA and Third-Party Authorization has been updated with the new form.

Other changes to the form include:

  • The notary section has been removed as it’s not a legal requirement.
  • Electronic signatures are allowed when the form is submitted as a pdf by email to: POADOR@DOR.STATE.MA.US with the following statement:

“The attached Power-of-Attorney form, designating _____________ to be the taxpayer’s representative, includes the (choose applicable term) taxpayer’s or representative’s typed name that they intend to serve as their valid signature, and intends to transmit on this form to the Massachusetts DOR.” (See Directive 20-1)

2/16/23: Guidance from the IRS on treatment of state tax payments

Last week the IRS issued guidance on the federal tax treatment of various state tax payments, including Chapter 62F refunds. The guidance is consistent with DOR’s previous guidance on the taxability of these refunds.

Chapter 62F refunds are not subject to state income tax.  According to the IRS guidance, 62F refunds are excluded from income for federal purposes if “the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit (for example, because the $10,000 tax deduction limit applied).” Refund recipients who itemized on their federal returns for Tax Year 2021 should have received a Form 1099-G from the Department of Revenue by January 31 of the year following the year in which the refund was received.  IRS Instructions for Form 1040, Schedule 1 include a worksheet to help recipients determine if they received a tax benefit.

The federal guidance does not address the payments made under the COVID-19 Essential Employee Premium Pay Program. Under current law, premium payments are not subject to state income tax but may be subject to federal income tax. Because the IRS reporting threshold for taxable grants is $600, no 1099-G will be issued from the Department of Revenue. Here is more information on the Premium Pay Program.

1/10/23: 4% Surtax on Income over $1 million

Impact on 2023 Withholding Tax Obligations

Last year, a statewide ballot measure amended Article 44 of the Massachusetts constitution to impose a surtax of 4% (the “surtax”) on taxable income above $1 million for tax years beginning on or after January 1, 2023. At this time, DOR does not intend to update the Income Tax Withholding Table (Circular M) to reflect the surtax. However, employers should use their best efforts to account for the surtax in determining how much to withhold. To ease compliance with the new law, for withholding tax returns and payments due by or before January 31, 2024, the surtax will not be taken into account in determining whether an employer withheld sufficient tax to avoid penalties or other negative consequences of failing to withhold sufficient tax. For example, the surtax will not be taken into account in determining whether a production company has withheld sufficient tax on any payment to a loan-out or an independent contractor to be eligible for a Film Incentive Credit.

Impact on 2023 Estimated Tax Obligations

At this time, DOR does not intend to update the 2023 Estimated Income Tax Payment Instructions, Worksheets, or the online Quarterly Estimated Tax Calculator to reflect the 4% surtax. However, individuals should use their best efforts to account for the surtax in determining how much to pay in estimated taxes. To ease compliance with the new law, for 2023 estimated tax payments due by or before January 15, 2024, the surtax will not be taken into account in determining whether there has been an underpayment of estimated tax.

1/9/23: IRS delay in changes to 1099-K reporting does not impact Massachusetts requirement

Please be aware that the recent IRS announcement of a delay in changes to the federal 1099-K reporting requirements for third party settlement organizations (“TPSOs”) does not impact the Massachusetts Form 1099-K requirement. TPSOs must report the gross amount paid in settlement to a payee with a Massachusetts address when the amount paid in a calendar year is $600 or greater, regardless of the number of transactions between the TPSO and the payee. A Form 1099-K, which can be either a Massachusetts Form M-1099-K or IRS Form 1099-K, must be provided to the payee by January 31st of the following year and must also be filed with the Department of Revenue by February 28th (March 31st if filing electronically).

For more information see TIR 17-11, 830 CMR 62C.8.1. and Massachusetts reporting requirements for third party settlement organizations – Form 1099-K.

10/12/22: Plan Ahead - MassTaxConnect will be offline for a short period of time

On Friday, October 21, 2022, at 11:00 PM EDT, MassTaxConnect (MTC), including all payment methods, will be unavailable and offline for maintenance. MTC will be back online starting Monday, October 24, 2022 at 6:00 AM. Please plan appropriately for this production downtime. We apologize for any inconvenience this may cause.

9/13/22: Changes to the Application for Abatement Process

We made some changes to the Application for Abatement (ABT) process on MassTaxConnect, and to the paper Form ABT on the website. The changes will help with processing and support the hybrid work model employed at DOR.

Here are the key changes:

  • The term “dispute” has been replaced with “appeal”
  • Additional information is requested including taxpayer email, spouse email and Account ID
  • Reminder added for taxpayers to file abatements electronically if required to e-file returns
  • Instruction references added for MV sales/use and Responsible Person appeals
  • Bubbles added for taxpayer to indicate Corporate Combined Excise and Pass-through Entity Withholding
  • Added “E-mail address of attorney in-fact” prompt on page 2
  • Added instructions for appealing a responsible person determination
  • Where needed, fields were expanded, and instructions were revised or added.

7/28/22: Email Phishing Campaign

A heads up that we are hearing from several taxpayers about an email phishing effort that appears to be from DOR stating that the person named in the email may be incorrectly claiming an out-of-state location - along with an effort to get them to click on a link to correct it. The hyperlink is titled Massachusetts Department of Revenue and could easily lure some to tap it. You may want to caution clients.

7/28/22: Changes to Process for Third-Party Access

Third-party access to a client’s account on MassTaxConnect will be streamlined in mid-August 2022 to be generated only by a third party and approved by a client/taxpayer. Currently, there is an option for the taxpayer to generate the third-party access through their account. That will no longer be available as of August 17. DOR sent a communication to third parties on the DOR Third-Party Public Directory to let them know about the change. Webpages will be updated on August 17 to reflect the new process.

3/31/22: A Form 1099-G or DOR notice may be sent to individuals for unemployment they didn't receive

A claim for unemployment using a false identity may result in the individual whose identity was stolen receiving a Form 1099-G or a DOR notice for the unemployment compensation paid. If this occurs, the individual should notify DOR by sending a secure message through MassTaxConnect and also notify the Department of Unemployment Assistance (DUA) as further detailed in DOR’s FAQs on this issue.

2/10/22: Important information about elective pass-through entity excise

Eligible pass-through entities must register for the 63D-ELT tax type before making a payment. Do not make 63D-ELT payments on other pre-existing tax types. The pass-through entity must file its annual return and make the election before filing the 2021 Form 63D-ELT. More information on PTE excise.

2/7/22: EITC Look-back Rule

Under federal law taxpayers can use their 2019 earned income to calculate their 2021 EITC if their 2019 earned income was more than their 2021 earned income.  In general, Massachusetts adopts federal rules related to the EITC. For tax year 2021, the MA EITC is 30% of the federal EITC whether the taxpayer used 2019 or 2021 income to calculate it. For more information on other recent changes to the EITC please see the Earned Income Tax Credit (EITC) page on DOR’s website. Electronic filing is the fastest way to get your refund and filers using their 2019 earned income amounts are still eligible to file electronically. 

1/31/22: Check box on Schedule HC for insurance info

If your clients would like to receive information from the Health Connector about obtaining health insurance coverage – be sure to check the new box on Schedule HC form. It’s just above Line 6 on Schedule HC, and by checking the box it gives DOR permission to notify the Health Connector about a taxpayer’s interest in obtaining health insurance coverage information. The Health Connector will then reach out to the taxpayer about eligibility and coverage options.

1/5/22: April 19, 2022 is income tax filing deadline

Taxpayers in Massachusetts will have until April 19, 2022 to file both their federal and state 2021 income tax returns. The IRS announced a due date of April 18 for filing federal income tax returns, the first business day following Emancipation Day, celebrated in Washington, D.C. on Friday, April 15, 2022. Patriots' Day is celebrated in Massachusetts on April 18, 2022, which moves the deadline for Massachusetts taxpayers to file 2021 income tax returns to the next business day of April 19, 2022.

11/18/21: New electronic filing requirements coming in 2022

For certain trustee taxes, December 2021 returns will be the last filing allowed on paper.  All sales/use, meals tax and sales on services filers will be required to submit returns and make payments through MassTaxConnect for tax periods beginning on or after January 1, 2022, including any past-due returns and payments for prior periods.  Current paper filers are encouraged to register to use MassTaxConnect sooner rather than later to avoid any last minute issues.  Go to and choose “Sign Up” to get started. 

New electronic filing requirements also impact taxpayers filing partnership income tax, corporation excise, financial institution excise and urban redevelopment excise.  All returns, regardless of income or number of partners in a partnership, will be required to file returns electronically for periods ending on or after December 31, 2021.  Payments must also be submitted electronically. 

For fiduciary taxpayers, all payments of $2,500 or more must be made electronically after December 31, 2021.  In addition, tax preparers preparing more than 10 fiduciary returns annually must submit them electronically beginning with tax periods ending on or after December 31, 2021 

11/15/21: New! Elective pass-through entity excise

Check out the new webpage with information on the elective pass-through entity excise. Legislation went into effect on September 30, 2021 allowing the new elective excise, which is in response to the $10,000 cap on the federal state and local tax deduction added in the 2017 federal Tax Cuts and Jobs Act. You’ll find FAQs that will shed light on who qualifies and how to elect the new excise.

11/1/21: HIRD due date approaches

The annual Health Insurance Responsibility Disclosure (HIRD) filing period for employers to report on employer-sponsored insurance runs from November 15 through December 15. This year, a question has been added to the online HIRD form relating to Health Connector Employee Choice. Employers that are no longer in business are not required to file the HIRD form. To learn more about HIRD, visit the FAQ page on our website.

10/22/21: New pass-through entity legislation preserves federal deduction for state income tax

Under the new legislation, if a pass-through entity elects to pay the new entity-level tax, the aggregated income would be subject to a 5% tax at the entity level. Each partner or member would then be allowed a credit on their MA individual tax return equal to 90% of the tax paid by the entity on their share of the entity’s income. Keep an eye out for the new return that’s currently being developed and some FAQs.

11/10/21: Tax Practitioners – help clients avoid non-filer notices

Please talk to your clients about past-due tax returns. If you are authorized by your client(s), follow the same process to file returns or update accounts as outlined in a communication that was sent today to taxpayers at risk of receiving a notice. Over the next several weeks DOR will be issuing Business Non-Filer Notices to taxpayers who failed to file one or more Withholding tax, Sales tax, Meals tax, Sales tax on Services and Room Occupancy tax returns. Some past due returns for Sales, Meals and Room Occupancy tax may relate to the monthly periods due March 20, 2020 through June 1, 2021, which were extended under the Covid-19 State of Emergency and became due on October 30, 2021.

6/14/21: New FAQs on penalty relief – FAQs now date stamped

Our FAQ page has been updated with new FAQs about penalties related to unemployment income and the impact of extended COVID-19 relief on vendors and operators required to make advance payments. Also, by request, we have started adding dates to new or updated FAQs, making it easier to identify what’s new on the FAQ page. Check back often for updates!

6/1/21: DOR completes review of returns filed before unemployment deduction legislation passed

DOR has reviewed all 2020 individual income tax returns filed on or before April 9 that included unemployment income. 

  • Adjustments have been made and refunds have been issued for returns that we determined were eligible for a refund.  If you believe you received a refund in error, please contact us at (617) 887-6367 before taking any action.  Note that simply not cashing the check will not resolve the problem.
  • Today we will begin sending notices to those we determined were not eligible for the Massachusetts unemployment deduction based on their income.   Review the eligibility rules and deduction calculation using our Unemployment Deduction Worksheet.  Anyone who receives a notice,  but believes they are in fact eligible for a deduction, is asked to contact DOR at (617) 887-6367. 
  • Learn more about the Massachusetts Unemployment Income Deduction on our FAQ page.

5/28/21: E-mail acknowledgements sent in error

This past weekend, during the conversion from one e-mail system to another, automated e-mail acknowledgements were erroneously sent in response to a group of outdated inquiries. The automated response acknowledged receipt of the email and promised a response from one of our staff. Although the emails were sent in error, they were in fact from DOR. Recipients do not need to report them or take any other action. We apologize for this error and any concern it may have caused.    

4/2/21: Stay up to date with new information on PPP loans and unemployment income

Catch up on the impact of new legislation in Massachusetts on PPP loan forgiveness income and unemployment income for Massachusetts taxpayers by reviewing the FAQs. We will add additional FAQs based on questions we receive from taxpayers or tax practitioners.

5/21/21: New webpage highlights differences between Massachusetts and federal tax law

As many of you know, Massachusetts generally follows the Internal Revenue Code (IRC) as of January 1, 2005 for personal income tax. When the federal tax law changes, taxpayers may need to adjust federal amounts when filing their Massachusetts return. We’ve recently posted a new webpage that will help you identify many of the common differences between Massachusetts and federal tax law. Comments and suggested additions to the page may be sent to

3/30/21: Pending legislation related to unemployment income exemption

Please be advised that pending legislation in Massachusetts may exempt a portion of unemployment for qualifying taxpayers. Taxpayers with unemployment income should consider waiting until the legislation is acted on before filing their returns

3/19/21: Individual Income Tax Returns and Payments Now Due May 17, 2021

The deadline has been extended for both filing individual income tax returns and making payments from April 15, 2021 to May 17, 2021.

What you need to know:

  • The income tax filing and payment deadline has been moved to May 17, 2021 for individuals only. The date change does not affect taxpayers other than individuals filing personal income tax returns and making payments.
  • The extension date of October 15 for personal income tax filing is unchanged.
  • Estimated payments due April 15 are not impacted by the date change and remain due on April 15.
  • Taxpayers who have already filed their personal income tax returns, but have not made the associated payment, will have until May 17 to make the payment.

For more information, please review the Technical Information Release and the press release.

3/22/21: FAQs for sales/use, meals, marijuana retail taxes and room occupancy excise filers

A provision in the FY21 Budget changed the due date for sales/use tax, meals tax, marijuana retail taxes and room occupancy excise tax returns. In addition, vendors and operators with a tax or excise liability over a certain threshold in the prior year will soon be required to make an advance payment before filing their tax return. Both changes apply to tax periods ending after April 1, 2021. Find out more on our updated FAQ page. These FAQs will be updated so please keep checking back. 

3/10/21: Paycheck Protection Loans and other Filing Season Topics

We’ve launched a special filing season FAQ page with common questions about PPP loan forgiveness and taxability of Coronavirus Relief Fund Grants. The FAQs will be updated as needed and more topics may be added so please keep checking back. 

3/5/21: Delay in Small Number of E-file Acknowledgements

On February 20, approximately 780 electronic returns were processed without an acknowledgement being sent out. This was an issue with DOR’s system, not any particular software vendor, and the returns were processed normally with refunds being issued if no additional review was required. If you did not receive an acknowledgement for a return filed around February 20, you can call our contact center at 617-887-6367 to verify that the return was received. Note that we expect the delayed acknowledgements to be issued shortly. 

2/10/21: New EITC Look-back Rule

Under the federal COVID-related Tax Relief Act of 2020, taxpayers can use their 2019 earned income to calculate their 2020 EITC if their 2019 earned income was more than their 2020 earned income. Massachusetts will allow this alternate calculation. For 2020, the MA EITC is 30% of the federal EITC whether the taxpayer used 2019 or 2020 income to calculate it. Electronic filing is the fastest way to get your refund and filers using their 2019 earned income amounts are still eligible to file electronically.

Visit DOR's Earned Income Tax Credit (EITC) page for more information.  

1/28/21: Form 1099G - Unemployment Compensation – How to Report Fraud

As you know, anyone who received unemployment benefits or pandemic unemployment benefits from the Commonwealth of Massachusetts during 2020 will receive a Form 1099-G, Certain Government Payments, showing the amount of unemployed compensation received. This income is taxable and must be reported on the 2020 Massachusetts Individual Income Tax return Form 1 or Form 1-NR/PY. If a taxpayer receives a Form 1099-G reporting unemployment benefits but did NOT receive unemployment benefits, someone may have used their identity to falsely claim unemployment benefits.  Ask them to notify the Department of Unemployment Assistance (DUA) by filing a fraud report online or call the DUA customer service department at 877-626-6800. Obviously, this income should not be reported on their Massachusetts Individual Income Tax return. After DUA reviews the fraud report, they will send a corrected Form 1099-G. Keep a copy of all Forms 1099-G with the taxpayer’s 2020 tax records and be aware that DOR may ask for an explanation of why the amount shown on the Form 1099-G was not reported on the return. 

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Last updated: April 2, 2021

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