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Massachusetts Senior Circuit Breaker Tax Credit

Certain seniors who own or rent residential property in Massachusetts, as their principal residence, are eligible for a refundable tax credit. Find out if you qualify and how to apply.

Updated: November 30, 2021

Table of Contents

Overview

As a senior citizen (65 or older before January 1, 2022), you may be eligible to claim a refundable credit on your Massachusetts personal income tax return. The Circuit Breaker tax credit is based on the actual real estate taxes paid on the Massachusetts residential property you own or rent and occupy as your principal residence.

The maximum credit amount for tax year 2021 is $1,170. If the credit you're owed exceeds the amount of the total tax payable for the year, you'll be refunded the additional amount of the credit without interest.

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Who is and isn't eligible

Who is eligible
 
  • You must be a Massachusetts resident or part-year resident.
  • You must be 65 or older by January 1, 2022.
  • You must file a Schedule CB with your Massachusetts personal income tax return
  • You must own or rent residential property in Massachusetts and occupy it as your primary residence.
  • For tax year 2021, your total Massachusetts income doesn't exceed:
    • $62,000 for a single individual who is not the head of a household.
    • $78,000 for a head of household.
    • $93,000 for married couples filing a joint return.
  • If you are a homeowner, your Massachusetts property tax payments, together with half of your water and sewer expense, must exceed 10% of your total Massachusetts income for the tax year.
  • If you are a renter, 25% of your annual Massachusetts rent must exceed 10% of your total Massachusetts income for the tax year.
  • The assessed valuation of the homeowner's personal residence as of January 1, 2021, before residential exemptions but after abatements, cannot exceed $884,000.
  • The Schedule CB must be completed within 3 years from the last day for filing the return, without regard to any extension of time to file.
Who isn't eligible
 
  • You are a nonresident. 
  • You are married and your status is married filing separately.
  • You are a dependent of another taxpayer.
  • You receive a federal and/or state rent subsidy or you rent from a tax-exempt entity.
  • For tax year 2021, the assessed value of principal residence exceeds $884,000.
  • If you did not complete a Schedule CB within 3 years from the last day for filing the return, without regard to any extension of time to file.
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How to apply

The Senior Circuit Breaker Tax Credit can not be applied for online with MassTaxConnect. Requests must be submitted by mail.

If you're eligible, complete Schedule CB with your Massachusetts state income tax return.

Also include:

  • Schedule HC - Health Care Information
  • Schedule Y, if you have certain deductions
  • Schedule B, if you have non-MA bank interest, dividends and short-term capital gains
  • Schedule D, if you have long-term capital gains or capital gain distributions.

Forgot to file your Schedule CB?
See What if I forgot to file Schedule CB for this or a prior year on this page.

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    Calculate your total income

    For the tax credit's purposes, your total income is your Massachusetts adjusted gross income (Massachusetts AGI) increased or decreased by various amounts when originally calculating Massachusetts AGI, such as:

    • Income from social security
    • Retirement 
    • Pension or annuities 
    • Cash public assistance
    • Tax-exempt interest and dividends
    • Short-term and long-term capital losses
    • Certain capital gains
    • Income from a partnership or trust not otherwise included in your Massachusetts AGI
    • Gifts
    • Returns of capital reported on Schedule C
    • Gross receipts from any other source other than the tax credit itself

    Include Massachusetts gross income when calculating total income. Generally, federal gross income excluded from Massachusetts gross income by specific law, such as interest from certain U.S. and MA obligations, is added back in the total income calculation.

    Generally, do not add back anything excluded from federal gross income into the total income calculation if it's not defined as income and not included in Massachusetts gross income by specific law. Do not add back subsidies, insurance programs and similar reimbursement programs, etc. into the total income calculation.

    Included (but not limited to) while calculating total income
     
    • Cash public assistance (Schedule CB, Line 6) - Includes food stamps and welfare, as well as other payments you received from a government or quasi-governmental agency such as emergency rental assistance due to a fire. Also includes:
      • Fuel assistance - Include it if paid directly to you. For example, include a one-time emergency check to fill a tank.
        However, if the assistance is paid through a discounted rate program (3rd party beneficiary and your income qualifies for below-market rates) the payment is generally considered in-kind assistance and you should exclude it from calculating income.
    • Disability income (Schedule CB, Line 6) - Include it if paid in lieu of wages
    • Food stamps - See cash public assistance above
    • Gains from sale of personal residence under $250,000/$500,000 (Schedule CB, Line 6)
    • Gifts (Schedule CB, Line 6)
    • Massachusetts and U.S. government contributory and military noncontributory pensions (Schedule CB, Line 5)
    • Previously taxed income distributions (Schedule CB Line 5) from:
      • IRA/Keogh
      • Annuity
      • Stock bonus
      • Pension
      • Profit sharing plan
    • Return of capital (Schedule CB, Line 6) - e.g. sale of stock: cost = $100, Selling Price = $500, gain = $400. Gain of $400 is reported as capital gain, and return of capital of $100 is added back in Line 6, Schedule CB.
    • Sick pay (Schedule CB, Line 6) - Include it if paid in lieu of wages
    • Social security benefits received (Schedule CB, Line 4) - These may include:
      • Retirement
      • Disability
      • Dependent
      • Survivorship
      • Insurance
        Do not subtract out Medicare premiums withheld from SS checks (Form 1099 SA).
    • Welfare - See cash public assistance above
    • Workers' compensation (Schedule CB, Line 6)
    Income added back:
     
    • Estate income (Schedule CB worksheet) - Earned income from an estate, e.g. the estate is in probate, or cannot be settled due to a pending lawsuit; any interest income earned from funds left in the account, or rental income earned from rental property that is part of the estate is included. Generally reported to beneficiaries on a K-1.
    • Gains included in U.S. Schedule D (not including losses) - CB Worksheet, Part 3., Lines 12 -17
    • Interest income from U.S. and Massachusetts government bonds, notes and bills - CB Worksheet, Part 2, Line 8
    Excluded while calculating total income
     
    • Estates - One time distributions that have been probated are not included since they're not part of federal gross income
    • Life insurance policies - Proceeds payments are not included since they're not part of federal gross income
    • Losses included in U.S. Schedule D
    • Net worth of assets - Accumulated earnings in an account such as deferred compensation, IRA, etc.
    • Payments, in-kind payments, or monies received that are otherwise not defined as:
      • Wages
      • Payments in lieu of wages
      • Income
      • Other income
      • Return of capital
      • Gross receipts
    • U.S. Series E and Series EE bonds - These are considered investment bonds and do not earn interest each year. Instead, the income is recognized federally only at the time the bond matures and the holder cashes it in. In years prior to maturity, there would be no income.

    For Schedules C and E, the net profit or loss amount = Massachusetts AGI. The only addback for purposes of calculating total income would be any return of capital.

    This total income amount is also reduced by certain exemptions that are allowed for:

    • Taxpayers who are at least age 65 by the end of the tax year
    • Dependents
    • Blindness
    • Certain deductions reported on Massachusetts Schedule Y, Lines 1 through 10

    Calculate your Circuit Breaker credit

    Remember, If you own your properties and your property tax payments (excluding any exemptions and/or abatements) are greater than 10% of your total income for the tax year, you can claim a credit equal to the difference between your property tax payments and 10% of your total income, including assessed water and sewer use charges.

    Total income:
     

    Massachusetts adjusted gross income
    + All other income excluded from Massachusetts gross income
    - Minus the personal income dependent, over age 65 and blindness exemptions
    = Total income

    Property tax payments:
     

    Total tax paid in the tax year (or 25% of rent)
    - Real estate tax abatements
    - Exemptions and other reductions you received in the tax year
    - Interest and penalty charges on late payments
    + 50% separately stated water and sewer charges paid in the tax year
    + Betterments
    = Property tax payments

    For homeowners, property tax payments are the actual amounts you paid during the calendar year after making certain adjustments. Include all property tax payments you made during the calendar year, regardless of which year payments apply to. Use all real estate tax payments made in the tax year, including amounts due for another year, to determine the correct property tax payment amount for purposes of the credit.

    Adjust your property tax payment amount by subtracting the following from total tax you paid in the tax year:

    • Abatements granted by local assessors
    • Exemptions granted by cities or towns to:
      • Qualifying veterans
      • Surviving spouses
      • Blind persons
      • Senior citizens who earned exemptions through the Senior Work Program. If you participate in the Senior Work program, you already receive a reduction in the property taxes you owe. Do not include this reduction in calculating property tax payments.
    • Interest and penalty charges on late payments

    No adjustment is required for taxes assessed:

    • Under the Community Preservation Act
    • Under the Cape Cod Open Space Land Acquisition Program or
    • By a tax-levying district
    Water and sewer use charges
     

    If you live in a community that doesn't include water and sewer debt charges in their property tax assessments, you can include, in addition to your own property tax payments, 50% of the actual water and sewer use charges you paid during the tax year when calculating your credit.

    Generally, you're allowed to include 50% of the total water and sewer charges you paid when calculating the Circuit Breaker property tax payment. However, certain communities already include water and sewer charges in their taxpayers' real estate tax bills.

    The communities that do this are:

    • Arlington
    • Avon
    • Hadley
    • Hatfield
    • Webster
    • Winchester

    Include betterments in the water and sewer use charges if they're directly connected to either constructing, repairing, and/or maintaining a water and sewer system, including sewage treatment plants.

    The cost to pump a septic tank does not qualify as water and sewer use charge since a private cleaning company cleans those and it is not a charge levied by a city or town.

    However, charges from a town sewage treatment facility (town health department) for processing septic tank waste and discharging it as a liquid is allowed since the amount is levied by a city or town.

    Amend your return: If you forgot to file Schedule CB for this or a prior year

    If you forgot to file a 2021 Schedule CB with your 2021 Massachusetts personal income tax return, you should file an amended return with your 2021 Schedule CB and complete the following. 

    • Fill in the Amended return oval on your income tax return and submit:
      • Schedule CB
      • Real estate tax bills and/or the actual tax paid, or proof of rent paid
      • Sewer and water bills or proof of the actual amount paid
    Prior years
     

    If you qualify for the Circuit Breaker credit in a prior tax year but didn't file Schedule CB with your original Massachusetts income tax return, you should follow the same procedure as above, except file a prior year Schedule CB for the year you qualify.

    Please note: If you did not complete a Schedule CB within 3 years from the last day for filing the return, without regard to any extension of time to file, you are not eligible for the Circuit Breaker credit.

    Property valuation changes during the tax year

    If you're a homeowner and the assessed value of your property changes during the tax year, you will not be eligible for the circuit breaker credit anymore if the assessed valuation (before residential exemptions but after abatements) of your principal residence rises above the threshold amount as of January 1 of the taxable year.

    Thus, if the assessed value of the principal residence rises above the threshold amount after January 1 during the year, you would still be eligible for the credit since the value is measured on January 1.

    If you dispute the assessed valuation and successfully receive a reduced valuation during the year, you can use the reduced assessed valuation. Your tax bill will also be reduced due to the real estate tax abatement that follows.

    If your principal residence is held in trust

    If your principal residence is owned by a grantor trust, and either you or your spouse is a trustee, then you would qualify as a homeowner.

    If your principal residence is owned by a grantor trust, and you or your spouse are not Trustees, then renter rules are applied when determining the allowable credit. For example, you're a former owner who creates a life state and puts property into the trust for your children's benefit.

    Generally, if you're under the terms of the trust, you pay to the trust in lieu of rent, you may treat these payments the same as if they were rent and should follow the renter rules when filing for the credit.

    Renter rules also apply if the principal residence is owned by an irrevocable trust, regardless of whether you or your spouse is a trustee.

    Assisted living facilities

    Assisted living facilities are either public or private facilities that provide housing and healthcare services such as 24-hour nursing care, emergency care, etc.

    You can't claim the real estate tax credit if you:

    • Receive rent subsidies under Section 8 or any other government housing subsidies
    • Live in a government housing authority
    • Live in an assisted living facility that's exempt from paying real estate taxes, such as public housing or a church-managed home

    Fees you paid to an assisted living facility are considered rent for the real estate tax credit purposes only if both criteria are met:

    1. The facility pays real estate taxes
    2. An actual landlord-tenant relationship exists between you and the assisted living center

    We'll look into the contractual agreement between you and the facility to determine if any of the monthly payment is considered as rent, which generally means either:

    • An amount for rent is separately stated on your bill from the center, or
    • A part of your monthly payment may be considered rent

    Payments you make to:

    • Nursing homes
    • Homes for the elderly
    • Retirement homes

    And other types of these facilities may not be considered rent unless a landlord-tenant relationship exists. We'll look into the contractual relationship between you and the facility to see if such a relationship exists.

    Owner's relationship
     

    While calculating the credit, you can use the amount of real estate tax you paid if you:

    • Own a unit
    • Pay the real estate taxes, and
    • Are assessed for your living unit directly to the city or town.

    If the facility has a structure similar to a co-operative where you pay a monthly fee that covers both real estate taxes and other types of services (i.e. medical and nursing care), only the part of the payment documented as related to the real estate tax paid can be considered. We'll look into the contract or ownership agreement to determine the nature of these payments.

    Residency: Avoid these common mistakes

    If you own either:

    • A multi-unit dwelling (a multi-family residence that includes your personal residence)
    • A land area bigger than 1 acre, or
    • A multi-purpose building or land area

    You must:

    • Only claim your own share of the real estate tax payments, including water and sewer use charges, that are related to the part of the residence you use and occupy as your principal residence.
      • For example, if a condominium association pays the sewer and water bill for multiple owners, each owner may only claim their own proportional share of the charges paid that are related to their own condominium.
    • Assess the properties that are related to the part of the residence you use and occupy as your principal residence.
      • For example, if you own more than 1 acre of land, use only the assessed value of your principal residence (together with the immediate surrounding land that's associated with that residence) that's smaller than 1 acre when determining if you're eligible for the credit.
    If you live in a multi-family home
     

    While checking if you qualify for the credit, if you're an owner-occupier of a multiple-unit dwelling, you can split up the assessed valuation of the entire property and base your share on the part of the residence you used and occupied as your own principal residence.

    For calculating the credit, you must also split up total property tax payments and base your share on the part of the residence you used or occupied as your principal residence.

    If you're a tenant of a multiple-unit dwelling, for the sake of calculating the credit, you can claim 25% of all the rent you paid for the rental unit.

    Be sure to claim only the portion of real estate taxes and water and sewer charges that apply to your portion of the property, rather than the entire bill.

    Single-unit dwellings
     

    Since there is only one dwelling for single-unit dwellings, the assessed valuation may not be split up even if multiple separate taxpayers are occupying the residence.

    For the sake of the credit, real estate tax payments are based on the actual amount an individual pays in the calendar year, regardless of how many people own the dwelling.

    If your property is more than one acre in size
     

    When determining credit eligibility, use only the assessed value of the principal residence together with the land that immediately surrounds and is related to the principal residence, as long as they don't exceed 1 acre when combined.

    If your real estate tax bill does not separately list the assessed value of the principal residence and the surrounding land up to 1 acre, contact the local city or town assessor for a breakdown of the real estate tax bill (e.g., 20 acre parcel with a house).

    Since you may only claim your own proportional share of the real estate tax payments, including water and sewer use charges, that corresponds to the part of the residence you used and occupied as your principal residence, you need to proportionally assess the taxes paid.

    Your local assessor’s office may be able to provide a breakdown of your real estate tax bill to help you with this calculation. 

    Assisted living facilities
     

    If you live or own an assisted living facilities visit the assisted living section of this page.

    Contact

    Phone

    Tax Department (617) 887-6367
    Toll-free in Massachusetts (800) 392-6089

    9 a.m.–4 p.m., Monday through Friday

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