Overview
There have been two recent law changes to the estate tax for decedents dying on or after January 1, 2023. See St. 2023, c. 50. and St. 2024, c. 206. First, on October 4, 2023, a new law amended the estate tax by providing a credit of up to $99,600, thereby eliminating the tax for estates valued at $2 million or less and reducing the tax for estates valued at more than $2 million. See St. 2023, c. 50. Second, on September 16, 2024, the estate tax was further amended for estates with real or tangible personal property located outside of Massachusetts. See St. 2024, c. 206. Below, you will find answers to frequently asked questions regarding these recent changes. DOR will continue to update this FAQ and issue further guidance as needed.
FAQs
How do I file an estate tax return for decedents who died on or after January 1, 2023?
The Department of Revenue (DOR) has released a version of Form M-706 for the estates of decedents who died on or after January 1, 2023. This version and its instructions will be updated to include changes to the calculation for the estates of decedents with real or tangible personal property located outside of Massachusetts. You can also file the estate tax return online at MassTaxConnect.
I filed an estate tax return for a decedent who died on or after January 1, 2023, before the version of Form M-706 for the estates of decedents who died on or after January 1, 2023 was first made available. The value of that estate was below $2 million. Is there anything I need to do?
No. You do not need to do anything if you have already filed the return, unless the return was for a decedent with out-of-state property. We will review the return and recalculate based on the $2 million threshold. If there is an overpayment on the account, a refund will be issued automatically. If the return was for a decedent with out-of-state property, please see the following question.
I filed an estate tax return for a decedent who died on or after January 1, 2023, with real or tangible personal property located outside of Massachusetts, before the version of Form M-706 for the estates of decedents who died on or after January 1, 2023 was updated to reflect changes to the estate tax calculation with regard to such property. Is there anything I need to do?
If you excluded property located outside of Massachusetts from the federal taxable estate on your previously filed estate tax return, you do not need to do anything. Otherwise, you may need to file an amended return. Please note that DOR is currently working to update Form M-706 for the estates of decedents who died on or after January 1, 2023. If you wish to amend a return before Form M-706 is updated, you can follow the following steps:
- For estates of resident decedents, complete Part 1 of Form M-706 by first reducing the total gross estate previously reported on line 1 of Part 1 by the gross value of real estate and tangible personal property in other states previously reported on line 4 of Part 2.
- For estates of nonresident decedents, complete Part 1 of Form M-706 by first replacing the total gross estate previously reported on line 1 of Part 1 with the gross value of real estate and tangible personal property in Massachusetts previously reported on line 3 of Part 3.
Use the new amount resulting on line 7 of Part 1 to calculate the Massachusetts estate tax due in Part 4. If the Massachusetts estate tax calculated is different than the amount calculated on the return that you filed, please file an amended return using this new methodology. If there was an overpayment on the account, a refund will be issued.
I need to file an estate tax return for a decedent who died on or after January 1, 2023, with real or tangible personal property located outside of Massachusetts, before the version of Form M-706 for the estates of decedents who died on or after January 1, 2023 is updated to reflect changes to the estate tax calculation with regard to such property. What should I do?
You can file the current Form M-706 for estates of decedents who died on or after January 1, 2023 using the methodology described in the answer to the previous question. For resident decedents, you will still need to report the gross value of real estate and tangible personal property in other states on line 4 of Part 2. For nonresident decedents, you will still need to report the gross value of real estate and tangible personal property in Massachusetts on line 3 of Part 3.
If I requested an extension to file or requested a lien release and made a payment for a decedent who died on or after January 1, 2023, and the federal taxable estate value is below $2 million, is there anything I need to do?
Yes. You still need to file an estate tax return to receive your refund.
My address has changed after filing the estate tax return on behalf of the decedent. What should I do to make sure I receive the refund?
You need to provide the new address by sending a message at MassTaxConnect account or by mail addressed to the Massachusetts Department of Revenue, Estate Tax Unit, 200 Arlington St., Chelsea MA 02150.
If the estate tax return total gross estate is $2 million or less but there is an adjusted taxable gift which when added exceeds $2 million, do I need to file a return?
Yes. You still need to file a return.
If the estate tax return total gross estate exceeds $2 million but is $2 million or less after reducing the estate by the value of real or tangible personal property located outside of Massachusetts, do I need to file a return?
Yes. You still need to file a return.
If I am not required to file an estate tax return, do I need to file a request for lien release?
No. You do not need to request a lien release. You can prepare an affidavit of no filing requirement and submit it to the registry where the property is located.
Does the new law change the computation of the federal taxable estate used to calculate the estate tax?
No. The new law does not change the computation of the federal taxable estate. You should calculate the federal taxable estate in the same manner as you would for the estates of decedents who died before January 1, 2023. For more information on calculating the federal taxable estate, go to the Massachusetts Estate Tax Guide.