DOR News – December 2022

Massachusetts Department of Revenue matters of interest for December 2022.

Table of Contents

Software vendors are testing now

Earlier this month testing began for tax software vendors. You can check on the testing status of your software vendor. We expect most vendors will take advantage of the testing process by the end of the month.

1099-Gs will reflect return refund and 62F refund

In January, the 1099-Gs are scheduled to go out to taxpayers who claimed itemized deductions on their federal return for Tax Year 2021. Note that they will contain a combined amount reflecting a taxpayer’s return refund, if there was one, and the 62F refund. The 62F refund is not taxable as income at the state level. All tax refunds, including the 62F refunds, are taxable by the federal government to the extent that the recipient claimed itemized deductions on their federal return for Tax Year 2021.

PFML Letters issued – what employers need to know

Earlier this month PFML Annual Liability Review Letters were issued to businesses that will be responsible for remitting the full family and medical leave contribution for employees in 2023. Note that, effective January 21, 2023, the employer contribution rate will be reduced. Businesses can use the calculator, which will be updated with the new rate on January 1, to help determine employer contributions.

Tax provisions in the FY ’23 budget

Recent guidance summarizes the tax changes included in the budget, most notably the changes resulting from Massachusetts conforming to the Internal Revenue Code as of January 1, 2022, for personal income tax purposes. More detailed guidance on those changes will be forthcoming.

Circuit breaker and earned income tax credit (EITC)

Two important credits for individuals are the Circuit Breaker credit, which can put money in the pockets of those age 65+, and the EITC, which is an essential credit for low to moderate income workers. Learn more about these credits by watching the short, informative Circuit Breaker credit and EITC videos. 

Reminder about other important credits and deductions

The deductions for dependent care expenses and household dependents have been replaced by refundable credits starting with tax year 2021. Take a look at guidance on those and other recent changes, including the permanent extension of deductions for contributions to college savings plans or prepaid tuition programs. More information on credits is available as you prepare for the upcoming income tax filing season.

E-file this filing season

Join the majority! Last filing season, 92% of income tax returns were e-filed. As always, we’ll begin to accept electronically-filed income tax returns when the IRS opens in mid-to-late January. While paper returns are accepted, by e-filing through a tax practitioner or one of the free options, refunds are faster, it’s secure, there’s no trip to the post office, and taxpayers have an electronic receipt.

Prior DOR News issues

If you missed a prior issue, visit DOR News. Also check out DOR's Tax Professionals page.

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