Technical Information Release  TIR 23-5: Chapter 62 Conformity to Select Provisions of the 2022 Internal Revenue Code

Date:	03/01/2023
Referenced Sources:	Massachusetts General Laws

This Technical Information Release (“TIR”) explains certain significant implications of recent legislation conforming M.G.L. chapter 62[1] (the “Code Update”) to the Internal Revenue Code (“Code”) as amended on January 1, 2022 and in effect for the taxable year (the “2022 Code”).  This legislation was enacted as part of the Massachusetts Fiscal Year 2023 Budget.[2] 

Chapter 62 conforms to many of the definitions set out in the Code.  Massachusetts gross income as defined in chapter 62 is based on the definition of federal gross income under the Code.[3]  Similarly, many of the deductions and exemptions allowed to offset Massachusetts gross income are determined by reference to the Code. 

Prior to the Code Update, chapter 62 generally conformed to the definitions, deductions and exemptions as set forth in the Code as amended on January 1, 2005 and in effect for the taxable year (the “2005 Code”).  As a result of the Code Update, for tax years beginning on or after January 1, 2022, chapter 62 conforms to many federal tax law changes that have been enacted since 2005.  Note that, under both current and prior law, chapter 62 adopts certain provisions of the Code as amended and in effect for the current taxable year (i.e., the year for which the personal income tax is being computed).[4]  These provisions are not affected by the Code Update.  Similarly, where chapter 62 specifically decouples from the Code, the Code Update has no impact.[5]   

In TIR 23-1, the Department of Revenue (“DOR”) identified numerous Code provisions enacted or amended since 2005 to which chapter 62 conforms.  This TIR explains in more detail the impact of the Code Update on Massachusetts conformity with respect to some of the provisions identified in TIR 23-1.  The provisions addressed in this draft are as follows:

• Code §§ 61(a)(8) and 62(a)(10): Repeal of inclusion of alimony received as gross income and repeal of deduction for alimony payments
• Code § 62(a)(2)(D): Educator’s expense deduction
• Code § 83(i): Property transferred in connection with performance of services – treatment of qualified equity grants
• Code § 108(a)(1)(E): Exclusion from gross income of discharged qualified principal residence indebtedness
• Code §§ 127(c)(1) and 221(e): Exclusion from gross income of certain employer payments of student loans
• Code § 132(f): Exclusion from gross income of employer-provided transportation fringe benefits
• Code §§ 132(g) and 217: Moving expense deduction and exclusion from gross income of qualified moving expense reimbursement
• Code § 132(n): Department of Defense Homeowners Assistance Plan
• Code § 137: Employer-provided adoption assistance
• Code § 139B: Exclusion from gross income of benefits provided to members of certain volunteer emergency response organizations; interplay with charitable deduction
• Code § 152: Modification of definition of “dependent”
• Code § 220: Archer Medical Savings Accounts
• Code § 274(a)(4): Limitation on deduction by employers of expenses for fringe benefits
• Code § 461(l): Limitation on excess business losses of noncorporate taxpayers (for tax years 2021 through 2026)
• Code § 1031(a)(1): Repeal of like-kind exchanges for “property other than real property”
• Code § 1202: Partial exclusion for gain from certain small business stock
• Code §§ 1400Z-1, 1400Z-2: Investments in qualified opportunity zones

Code §§ 61(a)(8) and 62(a)(10): Repeal of inclusion of alimony received as gross income and repeal of deduction for alimony payments

Under Code § 61(a), alimony or separate maintenance payments received from a former spouse is not included in the recipient’s federal gross income if those payments were made pursuant to any divorce or separation instrument executed after December 31, 2018.  Such payments are also not included in the recipient’s federal gross income if the payments were made pursuant to any divorce or separation instrument executed before 2019 but modified after 2018 to expressly provide that alimony or separate maintenance payments are not includible in the federal gross income of the recipient. 

In addition, a taxpayer cannot deduct alimony or separate maintenance payments to a former spouse from federal gross income if those payments were made pursuant to any divorce or separation instrument executed after December 31, 2018, or pursuant to any divorce or separation instrument executed before 2019 but modified after 2018 to expressly provide that alimony or separate maintenance payments are not deductible by the payer.[6] 

Prior to the Code Update, Massachusetts conformed to the federal income tax treatment of alimony and separate maintenance payments under the 2005 Code, as noted in TIR 18-14. Therefore, a taxpayer who paid alimony or separate maintenance payments to a former spouse could deduct the amount of such payments from Massachusetts gross income pursuant to now repealed Code § 215, and the recipient of such payments was required to include those payments in Massachusetts gross income pursuant to now repealed Code §§ 61(a)(8) and 71. 

As a result of the Code Update, Massachusetts conforms to the 2022 Code’s treatment of alimony and separate maintenance payments. Consistent with the federal rules, the elimination of the deduction for alimony payments and the inclusion of such payments in Massachusetts gross income to the recipient applies to (i) payments made pursuant to any divorce or separation instrument executed after December 31, 2018, and (ii) to any divorce or separation instrument executed before 2019 but modified after 2018 to expressly provide that alimony or separate maintenance payments are not deductible by the payer or includible in the gross income of the recipient.

Code § 62(a)(2)(D): Educator’s expense deduction

Code § 62(a)(2)(D) allows an eligible educator to deduct from federal gross income unreimbursed, qualified expenses (e.g., expenses for books, supplies, and computer equipment used in the classroom; expenses incurred during qualified professional development courses).  

Under the 2005 Code the educator’s expense deduction was scheduled to expire on December 31, 2005, as discussed in TIRs 05-16 and 07-4.  Consequently, the deduction has not been allowed for Massachusetts tax purposes since 2005.  However, the federal deduction was made permanent subsequent to 2005.[7] As a result of the Code Update, eligible educators may deduct qualified expenses under Code § 62(a)(2)(D), as described above, for Massachusetts purposes for tax years beginning on or after January 1, 2022.  The deduction is limited to an inflation-adjusted amount.[8]  For the 2022 tax year, the deduction is limited to $300, and, if the educator is married and files a joint return with another eligible educator, the limit rises to $600 with not more than $300 deducted per spouse.[9]

Code § 83(i): Qualified equity grants – treatment of qualified equity grants

Code § 83 provides that property transferred as payment in connection with the performance of services is income to a service provider.  In 2017, Congress adopted Code § 83(i) as it appears in the 2022 Code (“new Code § 83(i)”).[10]  In doing so, Congress repealed the prior version of Code § 83(i), which contained out-of-date rules concerning property transferred prior to 1973.  New Code § 83(i) permits eligible private corporations to adopt qualified equity grant plans for issuing stock options or restricted stock units and permits eligible employees to obtain qualified stock in exchange for the performance of services. New Code § 83(i) also allows such eligible employees to defer the recognition of income with respect to such stock for up to 5 years in certain instances.

Massachusetts did not previously conform to the rules in new Code § 83(i) because that section was enacted subsequent to the time of the 2005 Code, as noted in TIR 18-14.  However, as a result of the Code Update, Massachusetts adopts new Code § 83(i) with respect to qualified equity grants made on or after January 1, 2022.

Code § 108(a)(1)(E): Exclusion from gross income of discharged qualified principal residence indebtedness

Code § 108(a)(1)(E) excludes from federal gross income the discharge of indebtedness for a qualified principal residence (i.e., a mortgage) that is discharged before January 1, 2026, or which will be discharged subject to a written arrangement entered into before January 1, 2026.[11] 

Prior to the Code Update, Massachusetts did not conform to Code § 108(a)(1)(E) because that section was enacted subsequent to 2005 and therefore was not included in the 2005 Code.  As a result of the Code Update, income from the discharge of qualified principal residence indebtedness will be excluded from Massachusetts gross income for tax years beginning on or after January 1, 2022, to the same extent as excluded from federal gross income under Code § 108(a)(1)(E).  The maximum amount excludable from Massachusetts gross income as discharged qualified principal residence indebtedness is $750,000 ($375,000 if married filing separately).[12]

Code §§ 127(c)(1) and 221(e): Exclusion from gross income of certain employer payments of student loans

Code § 127 excludes from an employee’s federal gross income certain “educational assistance” provided by an employer.  The definition of “educational assistance” includes payments of an employee’s qualified education loan principal or interest thereon made by an employer before January 1, 2026.[13]  Code § 221(e)(1) prohibits an employee from claiming a deduction for payments of qualified education loan interest made by an employer on their behalf, to the extent those payments are excluded from the employee’s federal gross income under Code § 127.[14]

Prior to the Code Update, Massachusetts did not allow an exclusion from Massachusetts gross income for employer payments of an employee’s qualified education loan principal or interest because that exclusion was not allowed under the 2005 Code, as noted in TIRs 20-9 and 22-2.  Likewise, Massachusetts did not conform to the disallowance of employee deductions for interest paid by an employer on such loans.  Because of the Code Update, Massachusetts now conforms to Code §§ 127 and 221.  As a result, an employee may exclude from Massachusetts gross income employer payments of an employee’s qualified education loan principal or interest made on or after January 1, 2022 and before January 1, 2026.  Employees are not allowed a deduction for student loan interest payments made by an employer on their behalf when those payments are excluded from the employees’ Massachusetts gross income under Code § 127.

Code § 132(f): Exclusion from gross income of employer-provided transportation fringe benefits

Code § 132(f) excludes from an employee’s gross income employer-provided parking, transit pass, commuter highway vehicle transportation benefits, and qualified bicycle commuting reimbursements, subject to monthly maximum exclusion amounts.  Code § 132(f)(8) suspends the exclusion for qualified bicycle commuting reimbursements for tax years 2018 through 2025.[15]

Congress added the exclusion for qualified bicycle commuting reimbursements after 2005 and Massachusetts did not conform to it prior to the Code Update.[16]  Following the Code Update, Massachusetts conforms to this exclusion and will exclude from employees’ Massachusetts gross income employer-provided, qualified bicycle commuting reimbursements for taxable years beginning on or after January 1, 2026.

Prior to the Code Update, Massachusetts did conform to the exclusions for employer-provided parking, transit pass, and commuter highway vehicle transportation benefits because these exclusions were included in the 2005 Code.  However, the monthly maximum amount for these exclusions differed for Massachusetts and federal purposes because Congress increased the maximum amount after 2005, a change to which Massachusetts did not conform prior to the Code Update.[17]  As a result of the Code Update, Massachusetts conforms to this increase and the monthly maximum for these exclusions will be the same for Massachusetts and federal purposes for tax years beginning on or after January 1, 2022. 

Code § 132(f) adjusts the maximum amount of these exclusions based on inflation.  For the 2022 tax year, the monthly maximum exclusion for both Massachusetts and federal purposes is $280 for employer-provided parking and $280 for combined transit pass and commuter highway vehicle transportation benefits.  For the 2023 tax year, as noted in TIR 22-15, the monthly maximum exclusion will be $300 for employer-provided parking and $300 for combined transit pass and commuter highway vehicle transportation benefits.

Code §§ 132(g) and 217: Moving expense deduction and exclusion from gross income of qualified moving expense reimbursement

Code § 217 provides a deduction for moving expenses paid or incurred during the taxable year in connection with the commencement of work by a taxpayer as an employee, or as a self-employed individual at a new principal place of work.  Code § 132(g) provides an exclusion from federal gross income for any qualified moving expense reimbursement.  However, both the exclusion and deduction are disallowed for tax years beginning on or before December 31, 2025 and reinstated for subsequent tax years.  The disallowance does not apply to qualifying members of the Armed Forces.[18] 

Because the suspension of Code §§ 217 and 132(g) went into effect after January 1, 2005, Massachusetts continued to allow the moving expense deduction and moving expense reimbursement exclusion to all taxpayers, as noted in TIR 18-14.  However, because of the Code Update, for tax years beginning on or after January 1, 2022 through tax years beginning on or before December 31, 2025, Massachusetts will no longer allow most chapter 62 taxpayers to either (i) exclude qualified moving expense reimbursements from their Massachusetts gross income or (ii) deduct qualified moving expenses.  During that period, this deduction and this exclusion will be available only to qualifying members of the Armed Forces.  Qualifying members of the Armed Forces may not deduct moving expenses covered by reimbursements received from the government (or paid for directly by the government) that are excluded from their Massachusetts gross income.[19]

Code § 132(n): Department of Defense Homeowners Assistance Plan

Code § 132(n) excludes from federal gross income payments received under the United States Department of Defense Homeowners Assistance Plan for the compensation of military personnel and certain civilian employees for a reduction in the fair market value of their homes resulting from military or Coast Guard base closure or realignment. This exclusion was legislatively expanded after 2005 to apply to wounded members of the Armed Forces and their spouses.[20] 

Massachusetts conforms to Code § 132(n), as noted in TIR 05-16.  However, because the later expansion of this exclusion was enacted by Congress after 2005, Massachusetts did not previously conform to this later change.  As a result of the Code Update, Massachusetts now conforms to the expansion of the exclusion provided by Code § 132(n) for tax years beginning on or after January 1, 2022.

Code § 137: Employer-provided adoption assistance

Code § 137 excludes amounts paid or treated as paid by an employer for qualified adoption expenses on behalf of an employee.[21]  For taxable years beginning on or after January 1, 2022, the maximum amount of the exclusion is $14,890.  Also, the exclusion phases out for taxpayers with federal modified adjusted gross income in excess of $223,410, and completely phases out for taxpayers with federal modified adjusted gross income of $263,410 or more.[22] 

Massachusetts previously conformed to Code § 137, as noted in TIR 05-16.  However, in the 2005 Code, Code § 137 was set to expire for taxable years beginning after December 31, 2010. Therefore, Massachusetts no longer followed the exclusion for taxable years beginning on or after January 1, 2011, even though Congress subsequently, in 2012, extended Code § 137 permanently.[23]  As a result of the Code Update, Massachusetts conforms to the Code § 137 federal exclusion for adoption expenses paid or treated as paid by an employer on or after January 1, 2022.

Code § 139B: Exclusion from gross income of benefits provided to members of certain volunteer emergency response organizations; interplay with charitable deduction

Code § 139B excludes from the federal gross income of a member of a qualified volunteer emergency response organization (i) any qualified state or local tax benefit provided on account of the member’s services and (ii) qualified payments of up to $600 for the member’s services.[24]  The term “qualified volunteer emergency response organization” means any volunteer organization which is (i) organized and operated to provide firefighting or emergency medical services, and (ii) is required to provide such services by a state or local government.[25] 

Prior to the Code Update, the Code § 139B exclusions were not permitted under Massachusetts law.  This is because Code § 139B was enacted after 2005 and therefore was not included in the 2005 Code, as noted in TIR 22-2.  As a result of the Code Update, for tax years beginning on or after January 1, 2022, chapter 62 taxpayers may, consistent with Code § 139B, exclude from their Massachusetts gross income qualified state or local tax benefits and qualified payments of up to $600 for services as a member of a qualified volunteer emergency response organization. 

Under Code § 139B, a taxpayer may take a charitable deduction for expenses incurred in performing services as a member of a qualified volunteer emergency response organization only to the extent those expenses exceed the amount of the taxpayer’s qualified payments excluded from federal gross income under Code § 139B.[26]  The Massachusetts charitable deduction provided by G.L c. 62, § 3.B(a)(13) is not in effect for tax years beginning before January 1, 2023 but is allowed for tax year 2023 and subsequent tax years, as noted in TIR 22-5.  For tax years in which the Massachusetts charitable deduction is in effect, the deduction for expenses incurred in performing services as a member of a qualified volunteer emergency response organization is limited to such expenses that exceed the amount of qualified payments excluded under Code § 139B.

Code § 152: Modification of definition of “dependent”

Code § 152, which provides a definition of the term “dependent” for purposes of the Code, was included in the 2005 Code, but was subsequently amended.[27]  Pursuant to this section, as amended, an individual filing a joint federal income tax return can no longer be claimed as a dependent.  In addition, pursuant to the revised definition, a child can be the dependent of an individual who is not the child’s parent, as long as the individual’s adjusted gross income is higher than that of the child’s parent.[28]  The Code § 152 definition of a dependent is cross referenced in other Code sections, including Code § 151.[29]

Massachusetts relies on the definition of “dependent” in Code § 152 either directly, or indirectly through reference to Code § 151, with respect to (i) the deduction for tuition payments made on behalf of a dependent under G.L. c. 62, § 3.B(a)(11), (ii) the deduction for interest payments on student loans under G.L. c. 62, § 3.B(a)(12), (iii) the dependent exemption provided under G.L. c. 62, § 3.B(b)(3), (iv) the credit for dependent care expenses pursuant to G.L. c. 62, § 6(x), and (v) the credit for eligible dependents pursuant to G.L. c. 62, § 6(y).  As a result of the Code Update, Massachusetts conforms to the amended definition of a “dependent” in Code § 152 for taxable years beginning on or after January 1, 2022 for purposes of these provisions.

Code § 220: Archer Medical Savings Accounts

Code § 220 allows a taxpayer to exclude from federal gross income payments by an Archer Medical Savings Account (“Archer MSA”) for certain health care costs.[30]  Subsequent to 2005, Code § 220 was amended to exclude from federal gross income payments by an Archer MSA for specified medicine or drugs obtained without a medical prescription.[31] 

Prior to the Code Update, Massachusetts did not exclude from gross income payments by an Archer MSA for such specified expenses included under Code § 220 because Massachusetts conformed to the 2005 Code, as discussed in TIR 20-9.  As a result of the Code Update, Massachusetts now excludes from Massachusetts gross income payments by an Archer MSA for such medicine or drugs obtained without a prescription when the expense for such items is paid for on or after January 1, 2022.

Code § 274(a)(4): Limitation on deduction by employers of expenses for fringe benefits

Code § 274(a)(4) prevents employers from deducting amounts reimbursed to employees and excluded from employees’ income under qualified transportation fringe benefit plans.[32] 

Prior to the Code Update, Massachusetts did not conform to Code § 274(a)(4) as the provision was not part of the 2005 Code.  Therefore, employers subject to chapter 62 could deduct qualified transportation fringe benefits provided to employees, as noted in TIR 18-14.  As a result of the Code Update, Massachusetts conforms to Code § 274(a)(4).  Accordingly, for tax years beginning on or after January 1, 2022, employers subject to chapter 62 may not deduct qualified transportation fringe benefits provided to employees.

Code § 461(l): Limitation on excess business losses of noncorporate taxpayers (for tax years 2021 through 2026)

For taxable years beginning on or after January 1, 2021, and ending before January 1, 2027 (i.e., the 2021 through 2026 taxable years), Code § 461(l) prevents noncorporate taxpayers from deducting excess business losses.[33]  Excess business losses are defined to generally include losses in excess of gross business income plus $250,000 (adjusted for inflation).[34]  Further, disallowed excess business losses may be carried forward as net operating losses for federal income tax purposes.[35]

Prior to the Code Update, Massachusetts did not conform to the limitations under Code § 461(l) because that section was not included in the 2005 Code, as noted in TIRs 18-14 and 20-9.  As a result of the Code Update, Massachusetts now conforms to the limitations under Code § 461(l) for tax years beginning on or after January 1, 2022.  Losses disallowed because of the limitation may not be carried forward for Massachusetts purposes because Massachusetts does not allow a chapter 62 tax deduction for net operating losses.

In August 2022, Congress extended the Code § 461(l) limitation through the 2028 taxable year.[36]  Massachusetts conforms to the Code as amended on January 1, 2022 and in effect for the taxable year.[37]  Consequently, Massachusetts does not conform to the extension of the Code § 461(l) limitation through the 2028 taxable year.  Noncorporate taxpayers (i.e., chapter 62 taxpayers) will be prevented from deducting excess business losses from their Massachusetts gross income only through the 2026 taxable year.

Code § 1031(a)(1): Repeal of like-kind exchanges for property other than real property

For transfers made prior to January 1, 2018, Code § 1031 allowed the deferral of gain on like-kind exchanges of certain tangible personal property.  Effective for transfers on or after January 1, 2018, Code § 1031 was revised to allowed deferral of gain on like-kind exchanges of property only with respect to transfers of real property.[38]

Prior to the Code Update, Massachusetts allowed the deferral of gain on like-kind exchanges of certain tangible personal property, as noted in TIR 18-14.  As a result of the Code Update, Massachusetts will restrict the application of the like-kind exchange rules to exchanges of real property, effective for transfers on or after January 1, 2022.

Code § 1202: Partial exclusion for gain from certain small business stock

Code § 1202 excludes from federal gross income all of the gain from the sale or exchange of qualified small business stock held for more than 5 years.  The exclusion applies to gain on qualified small business stock acquired on or after September 27, 2010.[39]  However, under the 2005 Code, only 50% of the gain was excluded. 

Prior to the Code Update, Massachusetts applied the 50% federal exclusion for gain on qualified small business stock as in effect under the 2005 Code.  As a result of the Code Update, Massachusetts conforms to the 100% exclusion with respect to sales or exchanges of qualified small business stock that occur on or after January 1, 2022. 

In addition to the exclusion, Massachusetts taxes gain on the sale or exchange of certain small business stock at a reduced rate of 3%.[40]  Following the Code Update, the reduced rate is no longer applicable to gain that is eligible for the 100% exclusion as such gain is not included in Massachusetts gross income.  However, the reduced rate continues to apply to gain that is not eligible for the federal exclusion (e.g., gain on a sale or exchange of stock that would otherwise qualify for the exclusion but for the fact that it was issued by an S corporation), if all of the requirements for the reduced rate are met.

Code §§ 1400Z-1, 1400Z-2: Investments in qualified opportunity zones

Code § 1400Z-2 allows taxpayers to elect to defer gain on the sale of property for federal tax purposes to the extent the gain is invested in a “Qualified Opportunity Fund” (“QOF”) within 180 days of the sale of the original property.  Deferred gain is recognized when there is an inclusion event (e.g., sale of the interest in the QOF) or in the 2026 tax year, whichever is earlier.  The amount of deferred gain subject to tax is reduced if, at the time the deferred gain is recognized, (i) the interest in the QOF has been held for five years or more or (ii) the value of the QOF has decreased.  If the interest in the QOF is held for ten years or more, increases in the value of the QOF are excluded from federal income when the QOF is sold.  The federal reductions and exclusions are effectuated through tax basis adjustments in the QOF.

As a result of the Code Update, Massachusetts now conforms to Code § 1400Z-2 for chapter 62 taxpayers starting for tax years beginning on or after January 1, 2022.  Due to previous differences in Massachusetts and federal tax law regarding opportunity zones (see TIR 19-7), a chapter 62 taxpayer may have a different tax basis in their QOF interest for Massachusetts and federal purposes.[41]
 

                                                                        /s/Geoffrey E. Snyder
                                                                        Geoffrey E. Snyder
                                                                        Commissioner of Revenue
 

GES:RHF:db

March 1, 2023

TIR 23-5

 

[1] Chapter 62 imposes an income tax on resident and non-resident individuals, trusts, partnerships, and estates.

[2] St. 2022, c. 126, §§ 30, 189.

[3] G.L. c. 62, §§ 1(d), 2(a).

[4] Id.

[5] E.g., G.L. c. 62, § 2(d)(1).

[6] Public Law No. 115-97 (Tax Cuts and Jobs Act (“TCJA”)), § 11051 (repealing Code §§ 61(a)(8), 71, and 215).

[7] Public Law No. 114-113 (Consolidated Appropriations Act, 2016), Title VI, Part 1, § 104.

[8] Code § 62(d)(3).

[9] IRS Revenue Procedure 2021-45; IRS Bulletin IR-2022-148.

[10] TCJA, § 13603.

[11] Public Law No. 110-142 (Mortgage Forgiveness Debt Relief Act of 2007), § 2; Public Law No. 116-260 (Consolidated Appropriations Act, 2021), Division EE (Taxpayer Certainty and Disaster Tax Relief Act of 2020 (“TCDTRA”)), § 114.

[12] Code § 108(h)(2).

[13] Public Law No. 116-136 (Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), 2020), § 2206; TCDTRA, § 120.

[14] CARES Act, § 2206.

[15] TCJA, § 11047.

[16] Public Law No. 110-343 (Emergency Economic Stabilization Act of 2008), § 211.

[17] Consolidated Appropriations Act, 2016, Division Q, § 105(a).

[18] Code §§ 132(g)(2), 217(k); TCJA, §§ 11048, 11049.

[19] Code § 217(g)(2).

[20] Public Law No. 111-92 (Worker, Homeownership, and Business Assistance Act of 2009), § 14(a).

[21] Code § 137(a)(1).

[22] Code § 137(b)(1)-2; IRS Revenue Procedure 2021-45.

[23] Public Law No. 112-240 (American Taxpayer Relief Act of 2012), § 101(a).

[24] Mortgage Forgiveness Debt Relief Act of 2007, § 5.

[25] Code § 139B(c)(3).

[26] Code § 139B(b)(2).

[27] Public Law No. 110-351 (Fostering Connections to Success and Increasing Adoptions Act of 2008), § Title V, § 501(a), (b), (c)(2).

[28] Code § 152(b)(2), (c)(4)(c).

[29] Code § 151 provides the federal income tax exemption for dependents and is currently suspended until tax years beginning on or after January 1, 2026.  

[30] Code § 220(f)(1).

[31] Cares Act, § 3702(b) (amending Code § 220(d)(2)(A)).

[32] TCJA, § 13304.

[33] As originally enacted Code § 461(l) applied to taxable years beginning on or after January 1, 2018.  TCJA, § 11012. However, subsequent federal legislation delayed the effective date of the Code § 461(l) limitation to the 2021 taxable year. CARES Act, § 2304.  In addition, Congress extended the application of the Code § 461(l) limitation, which had been set to expire after the 2025 tax year, through tax year 2026.  Public Law No. 117-2 (American Rescue Plan Act of 2021), § 9041(a).   

[34] Code § 461(l)(3).

[35] Code § 461(l)(2).

[36] Public Law No. 117-169 (Inflation Reduction Act of 2022), § 13903(b)(1).

[37] G.L. c. 62, § 1(c).

[38] TCJA, § 13303.

[39] Code § 1202(a)(1), (4).

[40] G.L. c. 62, § 4(c).

[41] See G.L. c. 62, § 6F and TIR 88-7.