Blog Post  Tax Credits to Help Put Money in Your Pocket

In October 2023, Massachusetts (MA) passed significant tax cut legislation, which includes:

• Child and Family Tax Credit
• Increased Senior Circuit Breaker Tax Credit benefits  
• Increased Earned Income Tax Credit (EITC) benefits
• Increased Rental Deduction
• Estate Tax changes

In this blog, we’ll explore some of these tax changes and their potential impact on you (and your family).

Child and Family Tax Credit

As of January 1, 2023, you may claim a refundable, non-transferable child and family tax credit for every qualifying dependent listed below:

• children under age 13
• spouse:
  • physically or mentally incapable of self-care and
  • principally lives with you
• age 65 or older
• disabled

The credit is:

• $310 for each individual in tax year 2023 and
• $440 for each individual in tax year 2024

To claim the Child and Family Tax Credit, you must file a MA income tax return, even if you don't have any income to report.

Learn how to claim the credit on your 2023 tax return.

If you need to file a state tax return to receive a Child and Family Tax Credit, you can use MassTaxConnect.

Senior Circuit Breaker Credit

As someone who is age 65 years or older, you may be eligible to claim a refundable credit of up to $2,590 if:

• You or your spouse were age 65 or older in 2023
• You own or rent in Massachusetts as your principal residence
• Your total income for tax year 2023 does not exceed:
  • $69,000 for a single individual
  • $86,000 for a head of household
  • $103,000 for married couples filing a joint return
• Your assessed real estate valuation does not exceed $1,025,000

Infographic: Put up to $2,590 in YOUR pocket!

How to apply:

To claim the Circuit Breaker Credit, you must:

• File a MA state income tax return, even if you typically don’t file a return and
• Include Schedule CB, the Circuit Breaker Credit form

If you have an account, you can e-file your tax return for FREE using MassTaxConnect.

Learn how to create a MassTaxConnect account if you need one.  

For more details, go to the:

• Senior Circuit Breaker webpage and
• Senior Circuit Breaker video

MA Earned Income Tax Credit (EITC)

The MA Earned Income Tax Credit (EITC) is a tax break for low- to moderate-income workers and families.

If you qualify, the credit may:

• Reduce the taxes you owe and
• Increase your refund

As of January 1, 2023, EITC:

• increased from 30% to 40% of the federal credit for tax years
• is available if you (and your family) qualify for the federal EITC

To claim the EITC, you must:

• File a tax return and
• Be a Massachusetts resident for at least part of the taxable year

Keep in mind:

• Married taxpayers filing separate returns cannot claim the credit
• Nonresident taxpayers must prorate the credit

Visit EITC Overview and Eligibility to learn more. Have an EITC Question?

There’s nearby free help:

• at a VITA site or
• through AARP Tax-Aide

Increase to the Rental Deduction 

As of January 1, 2023, the cap on the rental deduction has been increased from:

• $3,000 to $4,000 and
• $1,500 to $2,000 if married filing separately  

The rental deduction is reported on the MA income tax return for residents (Form 1) or nonresidents (Form 1-NR/PY). 

Changes Affecting the Estate Tax

The 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

The estate tax is reported on Form M-706. 

The New Estate Tax Changes page has answers to frequently asked questions.

Short-term Capital Gains

As of January 1, 2023, the tax rate on short-term capital gains from the sale or exchange of capital assets decreased from 12% to 8.5%.

Short-term gains should be reported on Schedule B.

Expansion of the Commuter Deduction

For tax years beginning on or after January 1, 2023, the commuter deduction has expanded to include expenses incurred for:

• Massachusetts Bay Transit Authority (MBTA) fares
• Massachusetts regional transit authority fares
• Fares for any commuter boat owned, operated, or contracted by a municipality, public or quasi-public entity or agency (including bikeshare memberships)
• The cost of bicycles purchased for commuting (including electric bicycles and bicycle improvements, repairs, and storage)

The commuter deduction is reported on Schedule Y.

Increase to the Lead Paint Tax Credit

Effective for tax years beginning on or after January 1, 2023, the maximum amount of the Lead Paint Tax Credit has been:

• Increased from $1,500 to $3,000 for each residential unit in which lead paint was deleaded

Also, the maximum amount of credit for residential units in which lead paint was partially covered or removed has been:

• Increased from $500 to $1,000

Learn more about Massachusetts Residential Property Tax Credits.