Massachusetts' New Earned Income Tax Credit and Your Tax Return
Qualification considerations and what you can expectBy Kevin Salzman | Last updated on January 27, 2023
Use these links to jump to different sections:of increases in the state’s Earned Income Tax Credit (EITC). In previous years, Massachusetts’ EITC was set at 15 percent of the federal government’s EITC. Thanks to the American Taxpayer Relief Act and recent legislation extending its provisions, beginning in the 2016 taxable year, Massachusetts taxpayers who qualify for the state’s EITC will receive a refundable credit equal to 23 percent of the federal government’s EITC. Taxpayers who receive the state’s EITC may also qualify for the federal government’s Earned Income Tax Credit—combining the two can add up to thousands of dollars.
Who qualifies for Massachusetts’ EITC?Massachusetts’ EITC is not available to all taxpayers. The following taxpayers do not eligibility:
- Taxpayers who are married but file separately
- Taxpayers who do not file a tax return, even if they are not required to do so—in other words, you must file a tax return to claim the Massachusetts EITC
- Taxpayers who received $3,401 or more in investment income during the taxable year
- You must have lived in the United States for more than one-half of the taxable year
- You or your spouse must be least 25 years old but less than 65 years old before the end of the taxable year
- You were not a dependent of another taxpayer during the taxable year
How Much Money Can I Receive From the State’s EITC?Beginning in the 2016 tax year, the amount of the Massachusetts EITC has increased from 15 percent to 23 percent of the federal government’s EITC. This means that most filers who qualify for Massachusetts’ EITC in the taxable years of 2015 and 2016 will receive a larger earned income credit in the taxable year of 2016. For example, for the taxable year of 2015 a qualifying taxpayer with one qualifying child would receive a maximum Massachusetts EITC of $503.85. For the taxable year of 2016, this same taxpayer could receive a maximum Massachusetts EITC of $772.57. Common questions about the federal and Massachusetts EITC can be answered online through the Internal Revenue Service’s or Massachusetts Department of Revenue’s website. If you have specific questions or concerns about your tax liability or whether you qualify for an EITC, you should speak with an experienced tax attorney about your situation and circumstances. If you want more information on this area of law, see our tax overview.
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