1.400

1.400 Deductions from Adjusted Gross Income

Tax Expenditure Name
Tax Expenditure Number
FY2017
FY2018
FY2019
FY2020
FY2021
Deductions from Adjusted Gross Income
1.400
896.7
929.0
957.2
980.4
1,067.1
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Tax Item
Description
Origin
FY2021
1.401
Deduction for Employee Social Security and Railroad Retirement Payments
Taxes paid by employees to fund the Social Security and Railroad Retirement systems are deductible against "earned" income up to a maximum of $2,000 per individual.

Comment: The estimate also covers item 1.402 below.
332.0
1.402
Deduction for Employee Contributions to Public Pension Plans
Employee contributions to federal and state contributory pension plans are deductible against "earned" income up to a maximum of $2,000 per individual.
included in 1.401
1.403
Additional Exemption for the Elderly
A taxpayer age 65 or over is entitled to an additional exemption against "earned" income of $700 ($1,400 for a married couple filing jointly if both spouses are age 65 or over).
25.1
1.404
Additional Exemption for the Blind
A blind taxpayer is allowed an additional exemption against "earned" income of $2,200 ($4,400 for a married couple filing jointly if both spouses are blind).
0.7
1.405
Dependents Exemption Where the Child Earns Income
Taxpayers are allowed an additional exemption of $1,000 for a dependent child even when the child earns income against which a personal exemption can be taken.

Comment: The estimate cannot be separated from the figure for the dependents exemption in endnote 3.
IRC § 151(c) in effect January 1, 1988 and M.G.L. c. 62 § 3B(b)(3)
N.A.
1.406
Deduction for Dependents Under 12
Individual taxpayers and married taxpayers filing jointly with one or more dependents under age 12, who do not claim the deduction for child care described in item 1.409 below, may claim this deduction. Filers with one dependent under 12 may deduct $3,600, while filers with two or more dependents under 12 may deduct $7,200.
127.6
1.407
Personal Exemption for Students Age 19 or Over
A taxpayer may claim a dependent exemption of $1,000 for a child who is a full-time student even if he or she is 19 or over.
IRC §§ 151-152; M.G.L. c. 62 § 3B(b)(3)
9.7
1.408
Deduction for Adoption Fees
Adoption fees paid to a registered adoption agency are deductible against Part B income.
0.4
1.409
Deduction for Business-Related Child Care Expenses
Taxpayers qualifying for the credit for employment-related childcare expenses in the Internal Revenue Code are allowed a deduction against "earned" income for the amount of the expenses that qualify for the credit. Beginning in tax year 2001, the cap on this deduction was increased, and the coverage expanded to include elderly and disabled dependents. The cap increased from $2,400 to $3,600 for filers with one dependent, and from $2,400 to $4,800 for filers with two or more dependents. Beginning in tax year 2002, the cap was further increased to $4,800 for qualifying filers with one dependent and to $9,600 for filers with two or more dependents.

Comment: For federal tax purposes, the requirement that employment-related child care expenses relate only to children under age 15 was further restricted to children under age 13. In addition, a federal change now requires a taxpayer to include employer-provided dependent care expenses when calculating the limitation amount of qualifying expenses.
23.2
1.410
Exemption of Medical Expenses
Medical and dental expenses in excess of 7.5% of federal adjusted gross income are deductible against "earned" income for taxpayers who itemize deductions on their federal returns.
144.3
1.411
Rent Deduction
Renters are able to deduct against Part B income one-half of the rent paid for a principal residence located in Massachusetts up to a maximum deduction of $3,000 per year. This maximum was last raised in tax year 2001.
145.4
1.412
Nontaxation of Charitable Purpose Income of Trustees, Executors or Administrators
The adjusted gross income of trustees, executors or administrators, which is currently payable to or irrevocably set aside for public charitable purposes, is tax-exempt.
N.A.
1.413
Exemption of Interest on Savings in Massachusetts Banks
Up to $100 ($200 on a joint return) of interest from savings deposits or savings accounts in Massachusetts banks is excluded from "earned" income.
4.0
1.414
Tuition Deduction (Over 25% of Income)
A deduction is allowed for tuition payments paid, on behalf of a filer or their dependent, to a two-or four-year college leading to a degree or certificate. The deduction is equal to the amount by which the net tuition payments exceed 25% of the filer's Massachusetts AGI. See TIR 97-13 for more information. Non-residents and part year residents are ineligible for the deduction, effective for tax years beginning on or after January 1, 2017.
48.9
1.415
Charitable Contributions Tax Deduction
For tax year 2001, a deduction was allowed for charitable contributions in determining Part B taxable income. The deduction amount was equal to the taxpayer's charitable contributions for the year, as defined under the Federal Internal Revenue Code and without regard to whether the taxpayer elected to itemize deductions on his or her federal income tax return. Chapter 186 of the Acts of 2002 suspended this deduction until the year following the tax year the Part B rate declined to 5.00%. The Part B rate rolled back to 5.00% for tax year 2020, resulting in the reinstitution of this deduction for tax year 2021 and thereafter. The tax loss in FY21 results from filers adjusting their estimated payment during that fiscal year.
64.0
1.418
Deduction for Costs Involved in Unlawful Discrimination Suits
Massachusetts adopts the federal deduction for attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination, up to the amount included in gross income for the tax year from such claim.
N.A.
1.419
Business Expenses of National Guard and Reserve Members
Massachusetts adopts the deduction for unreimbursed overnight travel, meals and lodging expenses of National Guard and Reserve Members who must travel more than 100 miles from home to perform services as a National Guard or reserve member.
Negligible
1.420
Archer Medical Savings Accounts
Under the January 1, 1998 Code, Massachusetts allowed a deduction for an Archer Medical Savings Account (MSA) contribution only for individuals who were active MSA participants before January 1, 2001. As a result of legislation that aligned the Massachusetts tax code with the Internal Revenue Code as of January 1, 2005, Massachusetts adopts the federal deduction for Archer MSA contributions made on or after January 1, 2005 for all federally qualified individuals.
Negligible
1.421
Deduction for Clean-Fuel Vehicles and Certain Refueling Property
A federal and Massachusetts deduction is allowed for a portion of the cost of qualifying motor vehicles that use clean-burning fuel. Under the January 1, 1998 Code, this deduction was due to expire for vehicles placed in service after December 31, 2004. As a result of recently enacted legislation that aligned the Massachusetts tax code with the Internal Revenue Code as of January 1, 2005, Massachusetts adopted the new federal provision allowing the deduction for vehicles placed in service on or before December 31, 2006.
Negligible
1.422
Health Savings Accounts
Massachusetts adopted the federal deduction allowed to individuals for contributions to a Health Savings Account, subject to federal limitations, which are adjusted annually for inflation. For calendar year 2020, the maximum deduction limit is $3,550 for an individual plan and $7,100 for a family plan. Filers age 55 or older may increase the maximum deduction by $1,000.
12.0
1.423
Commuter Deduction
(Note: item 1.423 was formerly the temporary Tuition and Fees Deduction)

For tax years beginning on or after January 1, 2006, individuals may deduct certain commuting costs paid in excess of $150 for:

  • Tolls paid through the Massachusetts FastLane account; and

  • The cost of weekly or monthly passes for MBTA transit, bus, commuter rail, or commuter boat.

The total amount deducted may not exceed $750 per individual. Amounts paid must be reduced by any amounts reimbursed or otherwise deductible.
11.4
1.424
Self-Employed Health Insurance Deduction
Massachusetts adopts the federal deduction allowed to self-employed individuals for premiums on health insurance. Insurance may be for the individual, spouse, or family member. The insurance must be established under the self-employed individual's business.
54.4
1.425
Student Loan Interest Deduction (allowed Federally or by Massachusetts)
Massachusetts allows as an option the federal "interest on education loans" deduction. The federal deduction phases out based on modified AGI. As a result of the 2005 Code update, Massachusetts adopted the federal provision that temporarily repealed the 60 month limitation raised taxpayer income limitations through the end of 2010. Note that while these may be extended at the federal level, these increases sunset in Massachusetts at the end of 2010.

Alternatively, Massachusetts allows a deduction of undergraduate student loan interest. Filers may only choose one of these deductions.
52.5
1.426
Expenses of Human Organ Transplant
Massachusetts allows the expenses incurred in the donation of a human organ to be deducted from taxable income.
Negligible
1.427
Prepaid Tuition or College Savings Plan Deduction
A new deduction against Part B income is allowed in an amount equal to 1) purchases of or 2) contributions made in a taxable year to an account in a pre-paid tuition program or a college savings program established by the Commonwealth or an instrumentality or authority of the Commonwealth. The deduction is capped at $1,000 for a single person or head of household and $2,000 for a married couple filing a joint return.

The deduction applies to tax years beginning on or after January 1, 2017 through the tax year beginning on January 1, 2021.
10.2
1.428
Gambling Loss Deduction
For tax years beginning on or after January 1, 2015 a deduction is allowed from Part B income for gambling losses incurred at certain licensed gaming establishments or "racing meeting licensee or simulcasting licensee" establishments but only to the extent of winnings from such establishments included in gross income for the calendar year. See TIR 15-14 and Schedule Y, line 17 for more information. The new gambling loss deduction is the only deduction for gambling losses allowed for a Massachusetts taxpayer, unless the gambling activities constitute a trade or business. See DD 03-3. Note that Massachusetts does not adopt the federal deduction under IRC § 165(d) for gambling losses.
Origin: G.L. c. 62, § 3.B(a) paragraph (18)
1.3
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