Governor Charles D. Baker's Budget Recommendation - House 1 Fiscal Year 2016

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Credits Against Tax

Fiscal Year 2016 Resource Summary (in Millions)
TAX EXPENDITURE FY2012 FY2013 FY2014 FY2015 FY2016
Credits Against Tax 217.9 229.6 249.0 255.8 263.7

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item description amount
Credits Against Tax 263.7
1.601 Renewable Energy Source Credit 1.7
1.602 Credit for Removal of Lead Paint 2.9
1.603 EDIP/Economic Development Incentive Program Credit 3.7
1.604 Credit for Employing Former Full-Employment Program Participants Not Active
1.605 Earned Income Credit 136.3
1.606 Septic System Repair Credit 9.5
1.607 Low Income Housing Credit 1.0
1.608 Brownfields Credit 4.8
1.609 Refundable State Tax Credit Against Property Taxes for Seniors ("Circuit Breaker") 77.6
1.610 Historic Buildings Rehabilitation Credit 7.5
1.611 Film (or Motion Picture) Credit 2.1
1.613 Medical Device User Fee Credit Negligible
1.614 Dairy Farmers Credit 3.3
1.615 Conservation Land Credit 2.0
1.616 Employer Wellness Program Tax Credit 7.5
1.617 Community Investment Tax Credit 3.0
1.618 Farming and Fisheries Income Tax Credit 0.9


IRCFederal Internal Revenue Code (26 U.S.C.)
U.S.C United States Code
M.G.L. Massachusetts General Laws
Rev. Rul.; C.B. Revenue Ruling; Cumulative Bulletin of the U.S. Treasury
ESTIMATES All estimates are in $ millions.


1 1 This item and others citing this endnote cover employee fringe benefits. We accept as standard the following treatment of these benefits: the expense incurred by the employer in providing the benefit is properly deductible as a business expense and the benefit is taxed as compensation to the employee as if the employee had received taxable compensation and then used it to purchase the benefit. Of course, there are problems with this analysis. In some cases, the "benefit" is more a condition of employment than a true benefit. For example, a teacher required to have lunch in the school cafeteria may prefer to eat elsewhere even if the school lunch is free. On the other hand, in many cases the provision of tax-free employee benefits is clearly a substitution for taxable compensation.

2 2 This item and others citing this endnote cover contributory pension plans. The standard tax treatment of these plans is as follows: Component Standard Treatment Contributions: Made out of income that is currently taxed to employees. Investment Income: Taxed to the employee as "earned" income. Distributions from Pension Funds: Tax-free to the extent they are made out of dollars previously taxed to the employees as contributions or investment income. The non-standard treatment of contributions, investment income, or distributions as described in items 1.006, 1.101, 1.104, and 1.402, results in either nontaxation or deferrals of tax.

3 3 FY16 estimates for the basic personal exemptions and the no-tax status discussed in the introduction to the personal income tax are (in millions of dollars): Personal exemption for single taxpayers: $321 Personal exemption for married couples: $562 Personal exemption for married taxpayers filing separately: $15 Dependents exemption: $89 Personal exemption for heads of households: $103 Limited income credits: $12 No tax status: $15

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