DOR News - February 2022

Massachusetts Department of Revenue matters of interest for February 2022.

Important information about new 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 annual voluntary chapter 63D election on the return before filing the 2021 Form 63D-ELT. Partnership and S corporation returns are due March 15, 2022, and trust returns are due April 19, 2022. A pass-through entity will receive an automatic 6-month extension to file its return if at least 80% of the tax is paid by the due date of the return. More information on the PTE excise.

New lines on some business tax returns

Just a reminder that there are new lines on some 2022 business tax returns, including sales/use tax (including sales tax on services and meals), marijuana retail taxes, and room occupancy excise. Be sure to take a look at the information page that includes preview screenshots to help taxpayers prepare.

Helpful reminder: EITC look-back rule for taxpayers

Under federal law, taxpayers can use their 2019 earned income to calculate their 2021 Earned Income Tax Credit (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 uses 2019 or 2021 income to calculate the credit. For more information on EITC, please see the Earned Income Tax Credit page.

Tax filing tips

We are a few weeks into the 2021 tax filing season. Here are a few things to remember. For eligible taxpayers who are 65 and over, help spread the word about the Senior Circuit Breaker credit. Be sure to take advantage of child and dependent related credits. Also, for taxpayers who need to respond to fraud notices, our online Submit Documentation feature is the fastest way to get supporting documents to us. You’ll find it under “Quick Links” on MassTaxConnect.

Tax professionals: Information just for you

There are a few pages all Tax Professionals should bookmark. The Hot Topics for Tax Professionals page is our ever-evolving list of news updates. In addition, DOR’s What’s Trending page captures the pages that are getting the most attention, including information on the current filing season, new trustee tax return lines, advance payments, e-file mandates and more. And, if you want to report an issue, particularly one affecting multiple taxpayers, let us know at [e-mail].

More taxpayers may be required to make advance payments

Just a reminder for trustee taxpayers: some taxpayers may have just recently become subject to the advance payment requirement based on their cumulative tax liability in calendar year 2021. Taxpayers may be subject to the advance payment requirement if they meet the threshold of more than $150,000 in cumulative tax liability for the previous calendar year (i.e., January 1 through December 31). Visit the advance payment info page for more about the rules and calculations.

Property tax exemption deadline reminder

Friendly reminder that April 1, 2022, is the deadline to electronically file the annual Certification of Entity Tax Status with DOR. Annually, DOR publishes the Corporations Book that lists corporations or business entities taxable as corporations as of January 1 and is used by municipal assessors to determine whether entities are eligible for local personal property tax exemptions as corporations. If you do not file the certification by April 1^st, it is possible that you may not appear on the list for 2022. Please note, entities that are members of a combined group should each submit their own certification with DOR.

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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