1.600 Credits Against Tax

Credits Against Tax

1.600

527.3

524.3

847.7

1,065.4

1,222.9

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1.601
Renewable Energy Source Credit

Provide homeowners and tenants a credit equal to 15% of the net expenditure for renewable energy source property or $1,000, whichever is less. The credit is limited to certain types of equipment used directly for the production of solar or wind energy for residential properties.

M.G.L. c. 62, § 6(d)

6.7

1.602
Credit for Removal of Lead Paint

A personal income tax credit is provided to defray the cost that property owners incur when removing, containing, or replacing paint, plaster, or other accessible structural materials containing dangerous levels of lead in residential buildings constructed prior to 1978. A smaller credit is available for partial removal, containment, or replacement of such materials, so long as the partial remediation meets statutory requirements.

M.G.L. c. 62, § 6(e)

6.4

1.603
Economic Development Incentive Program Credit

Under the provisions of the Economic Development Incentive Program (EDIP), the Economic Assistance Coordinating Council (EACC) may authorize taxpayers participating in certified projects to claim tax credits. To be eligible, a project must be certified by the EACC. The total dollar amount of the EDIP credit that may be authorized in a calendar year is $30 million. See item # 2.605 for more details.

M.G.L. c. 63, § 38N; c. 62, § 6(g)

6.5

1.604
Credit for Employing Former Full-Employment Program Participants

This tax expenditure relates to a credit that is no longer active. The credit was required to be authorized by the Department of Transitional Assistance (DTA). However, the DTA is no longer authorizing this credit. When in effect, the credit provided employers an incentive to retain certain employees who had been hired under DTA's full employment program after program subsidies had run out.

St. 1995, c. 5, § 110(m)

Not Active

1.605
Earned Income Credit

Effective January 1, 2023, taxpayers are allowed a refundable credit against Massachusetts tax equal to 40% of the amount of the earned income credit claimed on their federal individual income tax returns. Note that, since the state credit amount is based on the federal, any changes, temporary or permanent, to the calculation of the federal credit will be automatically reflected in credit claims made against state tax. Note that while credit is refundable, it is not transferable.

M.G.L. c. 62, § 6(h)

459.5

1.606
Septic System Credit

Effective January 1, 2023, taxpayers required to repair or replace a failed cesspool or septic system pursuant to the provisions of Title V, as promulgated by the Department of Environmental Protection, are allowed a credit equal to 60% of the design and construction costs incurred, up to a maximum of $4,000 per tax year and $18,000 in total. For previous tax years, the credit is equal to 40% of the design and construction costs incurred (less any subsidy or grant from the Commonwealth), up to a maximum of $1,500 per tax year and $6,000 in total. Unused credits may be carried forward for up to five years. The credit is neither transferable nor refundable.

M.G.L. c. 62, § 6(i)

19.9

1.607
Low Income Housing Credit

The Low-Income Housing Tax Credit (LIHTC) is available to corporate excise and personal income taxpayers that invest in low-income housing projects that meet federal and state eligibility rules. The credit is part of a federal program that authorizes a federal credit for such investments and subsidizes state credits in states that opt into the program. The Massachusetts Department of Housing and Community Development (DHCD) determines eligibility for, and the amount of, the credit pursuant to federal guidelines. See also Corporate item 2.609.

M.G.L. c. 62, § 6I, c. 63, § 31H

18.1

1.608
Brownfields Credit

Taxpayers are allowed to claim a credit for amounts expended to remediate contaminated property owned or leased for business purposes and located within an economically distressed area. The Brownfields credit may be claimed by a taxpayer or non-profit corporation that commences and diligently pursues an environmental response action and achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E. Taxpayers may sell, transfer, or assign the credit. The environmental response action must be commenced on or before August 5, 2028, and eligible costs that qualify for the credit must be incurred before January 1, 2029. The credit may be carried forward for up to 5 years. The amount of the credit varies according to the extent of the environmental remedy. If the taxpayer's permanent solution or remedy operation status includes an activity and use limitation, then the amount of the credit is 25% of the net response and removal costs incurred by the taxpayer. However, if there is no activity and use limitation, then the amount of the credit is 50% of the net response and removal costs.

M.G.L. c. 62, §6 (j)

2.8

1.609
Refundable State Tax Credit Against Property Taxes for Seniors ("Circuit Breaker")

Seniors (taxpayers age 65 or older) are eligible for a tax credit to the extent that their property taxes - or 25% of rent - exceed 10% of their income. Income limits and a cap on the maximum assessed value of the filer's primary residence apply. The maximum credit is also adjusted annually for inflation, see Appendix A. Income limits and the maximum credit are adjusted for inflation over a 1999 base year; however, chapter 136 of the Acts of 2005 increased the assessed home valuation to $600,000 and set its base year to 2004. The base amount upon which the maximum credit is determined was doubled in the 2023 tax year. The credits may not be sold or transferred to another taxpayer, but are refundable.

M.G.L. c. 62, § 6 (k )

175.3

1.610
Massachusetts Historic Rehabilitation Credit

The Massachusetts historic rehabilitation tax credit is a credit for qualified expenditures made by a taxpayer in rehabilitating a qualified historic structure.

M.G.L. c. 62, § 6J; M.G.L c. 63, § 38R

16.4

1.611
Film Production Incentives (tax credit and sales tax exemption)

The Massachusetts film tax incentives, as amended in July 2007, allow a producer of a motion picture a tax credit equal to 25% of the film's production cost and 25% of the film's payroll costs. They also provide an exemption from sales tax for film productions in Massachusetts.

M.G.L. c. 62, § 6(l), c. 63, § 38X, c. 64H, § 6(ww)

2.0

1.613
Medical Device User Fee Credit

The Medical Device Credit is equal to 100% of the user fees actually paid to the United States Food and Drug Administration (FDA) by a medical device company during the taxable year for which the tax is due for premarket submissions to market new technologies or upgrades, changes, or enhancements to existing technologies, developed or manufactured in Massachusetts.

M.G.L. c. 63, § 31L; c. 62, § 6½

Expired

1.614
Dairy Farmer Tax Credit

Massachusetts provides dairy farmers a refundable personal income tax or corporate excise credit to offset cyclical downturns in milk prices. The credit is triggered when milk production costs exceed milk prices. The credit is determined by the Massachusetts Department of Agricultural Resources (MDAR), which notifies the Department of Revenue(DOR) of the amount of the credit awarded to each taxpayer. Effective January 1, 2023, the total cumulative value of the credits authorized pursuant to this section combined with M.G.L. c. 63, § 38Z is $8 million. These credits may not be sold or transferred to another taxpayer, but are fully refundable. See corporate item 2.618 for more details.

M.G.L. c. 62, § 6 (o)

5.0

1.615
Conservation Land Credit

Filers who donate land for conservation in perpetuity for the use of all citizens of the Commonwealth can receive a credit of up to $75,000. Approval of the donation is required from the Secretary of the Office of Energy & Environment Affairs. The credits may not be sold or transferred to another taxpayer, but are refundable. The total credits that may be approved are capped at $2.0 million annually.

M.G.L. c. 62, § 6 (p)

1.6

1.616
Employer Wellness Program Tax Credit

The 2012 Health Care Act establishes an Employer Wellness Program Tax Credit that is effective for tax years beginning on or after January 1, 2013 and is set to expire on December 31, 2017. The Employer Wellness Program Tax Credit was created to provide incentives for business to recognize the benefits of wellness programs with the goal of providing smaller businesses with an expanded opportunity to implement these programs. The credit is available to both chapter 62 and chapter 63 taxpayers (personal income taxpayers and corporate & business excise taxpayers). The credit is set at 25 percent of the costs associated with implementing a "certified wellness program." The maximum amount of Employer Wellness Program Credits available to a taxpayer is $10,000 in any tax year. The total amount of Employer Wellness Program Credits authorized by the Department of Public Health is subject to a $15 million annual cap starting calendar year 2013. The Employer Wellness Program Tax Credit is non- refundable and non-transferrable. However, the portion of the Employer Wellness Program Tax Credit that exceeds the tax for the taxable year may be carried forward and applied against such taxpayer's tax liability in any of the succeeding 5 taxable years.

St. 2012, c. 224, §§ 41, 41A, 56, 56A, 238, 239, 297, and 298. M.G.L. c. 62, § 6N; M.G.L. c. 63, § 38FF

Expired

1.617
Community Investment Tax Credit

A personal income tax and corporate excise credit is available for 50% of qualified investments in "community partners" selected by the Executive Office of Housing and Livable Communities through a competitive process. The community partner then uses the amount invested to fund approved programs designed to improve economic opportunities in Massachusetts communities. Such investments are in the nature of contributions, i.e., the investor does not receive any equity or other financial stake in the programs that are funded. The 2012 Jobs Act provides a Community Investment Tax Credit that is effective January 1, 2014 and is set to expire on December 31, 2019. However, St. 2018, chapter 99, § 25 extended the sunset date for the credit to year 2025. The total amount of the credit was subject to a $3 million cap in taxable year 2014, and $6 million in each year of taxable years 2015 through 2018, $8 million in each year of taxable years 2019 and 2020, $10 million in each year of taxable years 2021 and 2022, and $12 million in each year of taxable years 2023 through 2025. This credit is refundable, but not transferrable and it could be carried over up to five years.

M.G.L. c. 62, § 6M; c. 63, § 38EE

8.4

1.618
Farming and Fisheries Tax Credit

Personal income taxpayers who are primarily engaged in agriculture, farming, or commercial fishing are allowed an investment tax credit equal to 3% of the cost of qualifying property used in such activities in Massachusetts.

M.G.L. c. 62, § 6(s)

0.3

1.619
Certified Housing Development Tax Credit

A personal income tax and corporate excise credit is allowed for up to 25% of costs incurred in constructing or rehabilitating housing in areas designated by the Department of Housing and Community Development (DHCD). Eighty percent of the housing must be available for rent or sale at market rate prices. Designated areas must be located in a city or town identified by statute as a gateway municipality. The DHCD determines eligibility for, and the amount of, the credit.

St. 2010, c. 240; M.G.L. c. 40V; G.L. c. 62, § 6(q).

7.4

1.620
Veteran's Hire Tax Credit

A credit is available to businesses that hire veterans who live and work in Massachusetts. The credit is equal to $2,000 for each qualified veteran hired. Businesses with 100 or fewer employees may claim a $2,000 credit against the corporate excise or personal income tax for each qualified veteran hired. See TIR 17-10.

M.G.L. c. 62, § 6(u)

0.5

1.621
Apprentice Tax Credit

A personal income tax and corporate excise credit is allowed to employers that establish apprenticeship programs in designated computer technology, health care technology or manufacturing occupations. The credit is equal to the lesser of $4,800 or 50% of the wages paid to the apprentice in a taxable year.

M.G.L. c. 62, § 6(v); M.G.L. c. 63, § 38HH

Negligible

1.622
Disability Hire Credit

Effective for tax years beginning on or after January 1, 2023, employers that hire disabled employees may claim a nontransferable, refundable credit equal to (i) the lesser of $5,000 or 30% of the wages paid to a disabled employee in the employee's first year of employment, and (ii) the lesser of $2,000 or 30% of the wages paid to a disabled employee in each subsequent year of the employee's employment. The credit is available to employers provided that (i) the employee is certified by the Massachusetts Rehabilitation Commission as having a disability as defined under the Americans with Disabilities Act, 42 U.S.C. § 12102; (ii) the employee is capable of working independently; (iii) the employee has a mental or physical disability that constitutes or results in a substantial impediment to employment; (iv) the employee is hired after July 1, 2021; (v) the employee's primary place of employment and primary place of residence is in Massachusetts; (vi) the employer must obtain certification from the Massachusetts Rehabilitation Commission that the employee is qualified no later than the employee's first day of work; and (vii) the employer employs the employee for at least 12 consecutive months prior to and in the taxable year in which the credit is claimed.

M.G.L. c. 62, § 6(z).

1.0

1.623
Cranberry Bog Renovation Credit

Effective for tax years beginning on or after January 1, 2020, taxpayers primarily engaged in cranberry production may claim a nontransferable, refundable credit equal to 25% of expenses incurred in the renovation, repair, replacement, regrading or restoration of a cranberry bog for the cultivation, harvesting or production of cranberries. The Secretary for Energy and Environmental Affairs determines eligible costs and the amount of the credit. The amount of credit that can be claimed by a taxpayer for a taxable year cannot exceed $100,000. The credit is no longer available for taxable years beginning on or after January 1, 2030.

M.G.L. c. 62, § 6(w).

1.0

1.624
Credit for Eligible Dependents

Effective for tax years beginning on or after January 1, 2021, taxpayers may claim a nontransferable, refundable credit for eligible dependents. To claim the credit, a taxpayer must furnish over half of the cost of maintaining a household. The household must include a dependent that qualifies as a dependent under IRC § 152 and who is (i) under the age of 12; (ii) age 65 or over; or (iii) disabled. The credit is equal to $180 if the taxpayer claims one dependent, or $360 if the taxpayer claims two or more dependents. The credit cannot be claimed by married taxpayers that file separate Massachusetts personal income tax returns. A taxpayer claiming this credit may not also claim the credit for dependent care expenses allowed under G.L. c. 62, § 6(x).

M.G.L. c. 62, § 6(y).

Expired

1.625
Dependent Care Expenses Credit

Effective for tax years beginning on or after January 1, 2021, taxpayers may claim a refundable, nontransferable credit for dependent care expenses. The credit is equal to "employment-related expenses" allowed for purposes of determining the credit provided under IRC § 21. Under IRC § 21, employment-related expenses include certain expenses incurred to enable the taxpayer to be gainfully employed, including household expenses and expenses for the care of a qualified individual. A qualifying individual is (i) a dependent of the taxpayer who is younger than 13 years old; or (ii) a dependent of the taxpayer, including a spouse, who is physically or mentally incapable of taking care of himself or herself and principally lives with the taxpayer. The credit cannot exceed $240 if the taxpayer claims expenses for one qualifying individual, or $480 if the taxpayer claims expenses for two or more qualifying individuals. Married taxpayers must file a joint federal income tax return to claim the credit. For taxpayers that file a joint federal income tax return and who file as married filing separately in Massachusetts, either spouse may claim the credit for expenses he or she incurred, but the combined credit for both spouses cannot exceed $240 for one qualifying individual or $480 for two or more qualifying individuals. A taxpayer claiming the credit may not also claim the dependent credit allowed under G.L. c. 62, § 6(y).

M.G.L. c. 62, § 6(x).

Expired

1.626
Offshore wind tax incentive program: cover the Wind Power Incentive Jobs Credit and Wind Power Incentive Investment Credit

The Massachusetts offshore wind tax incentive program consists of two tax credits, a Wind Power Incentive Jobs Credit and a Wind Power Incentive Investment Credit, for offshore wind companies subject to either the personal income tax or the corporate excise. The credits are available to certified offshore wind companies only to the extent authorized by the Massachusetts Clean Energy Technology Center (the "Center"), may be claimed starting with taxable years beginning on or after January 1, 2023, share an annual cap of $35,000,000, are subject to recapture in the event that the offshore wind company's certification is revoked by the Center, and expire on January 1, 2033. For offshore wind companies subject to the personal income tax, the credit is attributed on a pro rata basis to the owners, partners, or members of the legal entity. The Wind Power Incentive Jobs Credit is available to certified offshore wind companies that commit to the creation of a minimum of 50 net new permanent full-time employees in Massachusetts. Effective for taxable years beginning on or after January 1, 2024, certified offshore wind companies must commit to the creation of a minimum of 10 net new permanent full-time employees in Massachusetts. Where the credit exceeds the taxpayer's liability for the taxable year, 90 percent of such excess credit may be refunded to the taxpayer. Excess credit amounts cannot be carried forward to subsequent taxable years. The Wind Power Incentive Investment Credit is available for certified offshore wind companies that make a capital investment in an offshore wind facility that they either own or lease in an amount up to 50 percent of such investment. The total amount of the credit awarded is distributed in equal parts over five taxable years that correspond to the period in which the offshore wind company is certified. Eligibility requirements vary depending on whether the certified offshore wind company owns or leases the offshore wind facility, but, in general, the certified offshore wind company must demonstrate to the Center that (i) it has a total capital investment in an offshore wind facility that equals not less than $35,000,000; and (ii) the offshore wind facility must employ not less than 200 new full-time employees by the fifth year of the offshore wind company's certification. A certified offshore wind company claiming this credit may not also claim the Wind Power Incentive Jobs Credit or the Economic Development Incentive Program Credit provided by M.G.L. c. 62, § 6(g) in the same taxable year.

M.G.L. c. 23J, § 8A; M.G.L. c. 62, § 6(bb), (cc).

2.5

1.627
National Guard Credit

A business employing not more than 100 employees may be allowed a credit equal to $2,000 for each member of the Massachusetts national guard hired by the business. To be eligible for a credit: (i) the primary place of employment and the primary residence of the member of the Massachusetts national guard must be in Massachusetts; and (ii) not later than the day an individual begins work, a business shall have obtained the applicable certification from the office of the adjutant general that the individual is a member of the Massachusetts national guard. A business that claims this credit is eligible for a second credit of $2,000 in the subsequent taxable year with respect to such member of the Massachusetts national guard, subject to certification of continued employment during the subsequent taxable year. The credit is nontransferable and nonrefundable. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward to any of the three subsequent taxable years. The credit must be attributed on a pro rata basis to the owners, partners or members of the legal entity entitled to the credit. The personal income and corporate excise versions of this credit are subject to the same annual cap of $1,000,000.

M.G.L. c. 62, §6(aa); St.2022, c.154, § 7.

0.1

1.628
Child and Family Tax Credit

Effective for tax years beginning on or after January 1, 2023, taxpayers may claim a nontransferable, refundable credit if they maintain a household that includes an individual who is (1) under the age of 13 and who qualifies for exemption as a dependent for federal purposes; (2) a dependent, or the taxpayer's spouse, who is physically or mentally incapable of taking care of himself or herself and principally lives with the taxpayer; or (3) a dependent who is age 65 or over or disabled. The credit cannot be claimed by a person who is a non-resident for the entire taxable year or married taxpayers that file separate Massachusetts personal income tax returns. For the tax year beginning on or after January 1, 2023, the amount of the credit is equal to $310 for each such individual. The credit will be increased to $440 for each such individual for tax years beginning on or after January 1, 2024.

M.G.L. c. 62, § 6(x)

467.0

1.629
Renewable Energy Source Credit

Starting with taxable years beginning on or after January 1, 2024, partnerships, limited liability corporations, or other legal entities subject to the personal income tax that provide training to a qualified trainee through an authorized training program may claim a temporary authorized training tax credit for emergency assistance. A qualified individual is an individual receiving benefits through the emergency housing assistance program pursuant to G.L. c. 23B, § 30. To qualify for the credit, a taxpayer must (1) have a place of business in the Commonwealth; (2) conduct an authorized training program in the Commonwealth that is in compliance with recommendations of the Executive Office of Labor and Workforce Development ("EOLWD"); (3) enroll the qualified trainee in an authorized training program on or after April 30, 2024; and (4) meet any additional requirements determined by the Executive Office for Administration and Finance and EOLWD. The credit is equal to $2,500 for each qualified trainee that receives the training from the entity. The amount of the credit that exceeds the tax due for a taxable year may be carried forward to the subsequent taxable year. The credit is subject to an annual cap of $10,000,000. The credit may no longer be claimed as of (1) January 1, 2026; or (2) the taxable year in which the end of the capacity limitation on the emergency shelter assistance program occurs, whichever is sooner. See TIR 24-7 for more information.

M.G.L. c. 62, § 6(dd)(1)

2.0

1.630
First-Time Homeownership Development Credit

Starting with taxable years beginning on or after January 1, 2025, personal income taxpayers may claim a Massachusetts homeownership tax credit in relation to a qualified homeownership development project to the extent authorized by the Executive Director of the Massachusetts Housing Finance Agency ("MHFA"). The credit is non-refundable but is transferrable. The amount of the credit authorized by MHFA cannot exceed the maximum credit amount, which is 35% of the lesser of either: (1) the project's total qualified project expenditures calculated on a per single-family dwelling basis; or (2) 80% of the area median new single-family dwelling sales price, subject to further limitations established by MHFA. A sponsor cannot claim the credit before the first taxable year stated on the eligibility certificate issued to the sponsor by MHFA. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward for the duration of the qualified homeownership development project's affordability period, which is a 10-year period that begins as of the date of the first sale of a single-family dwelling that was constructed as part of the project. The credit is subject to recapture. The amount of credits that MHFA can authorize annually cannot exceed the sum of (1) $10,000,000; (2) any credit amounts not authorized in the preceding taxable year; and (3) any credits returned to MHFA by a sponsor. Effective January 1, 2030, the amount of credits that can be authorized annually is the sum of (1) any credit amounts not authorized in the preceding taxable year; and (2) any credits returned to MHFA by a sponsor.

M.G.L. c. 62, § 6O

2.0

1.631
Qualified Conversion Project Tax Credit

Starting with taxable years beginning on or after January 1, 2025, personal income taxpayers may claim a refundable, non-transferable qualified conversion credit in relation to a qualified conversion project that has been certified by the Executive Office of Housing and Livable Communities ("EOHLC"). To claim the credit, a sponsor must submit a project proposal to EOHLC requesting the certification of a housing development project as a qualified conversion project. After certifying the project, EOHLC determines the amount of credit awarded to the sponsor, which cannot exceed 10% of the qualified conversion's project's development costs. The credit is allowed for the taxable year in which EOHLC notifies the Commissioner of the certified qualified conversion project's completion. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward to any of the 10 taxable years subsequent to the taxable year that the credit was allowed. The credit is subject to recapture. The credit is no longer available for taxable years ending after December 31, 2029.

M.G.L. c. 62, § 6(ee)

1.0

1.632
Climatetech Tax Incentive Program

Massachusetts provides a climatetech tax incentive program, which is administered by the Massachusetts clean energy center ("CEC"), in consultation with DOR. The tax incentives consist of three tax credits, the climatetech capital investment tax credit, a refundable climatetech jobs tax credit, and a climatetech qualified research expenses tax credit; as well as a sales and use tax exemption for purchases of tangible personal property to be used for the construction of research, development or manufacturing or other commercial climatetech facilities. The incentives all share an annual cap of $30 million and are effective for taxable years beginning on or after January 1, 2024. The climatetech capital investment tax credit is a refundable tax credit available to personal income and corporate excise taxpayers who make capital investments in a climatetech facility. The amount of the credit is determined by the CEC, but cannot exceed 50% of the owner's total capital investment in the facility. The refundable climatetech jobs tax credit is a refundable tax credit available to personal income taxpayers who commit to creating at least 5 net new jobs in Massachusetts. The amount of credit is determined by the CEC. Where the credit exceeds the taxpayer's liability, 90% of excess credit amount is refunded to the taxpayer.

M.G.L. c. 62, § 6(gg), (hh)

6.0

1.633
Live Theater Tax Credit

The live theater tax credit program is administered by the Massachusetts Office of Business Development, in consultation with DOR. The credit is available to personal income and corporate excise taxpayers. The amount of the credit cannot exceed $7,000,000 and is equal to (1) 35% is of the total in-state payroll costs; (2) 25% of production and performance expenditures; and (3) 25% of transportation expenditures. The credit is not refundable, but is transferrable. Any unused amount of credit may be carried forward to the next 5 taxable years. The annual amount of credits that can be authorized cannot exceed $7,000,000. The credit is effective for taxable years beginning on or after January 1, 2025 and expires on January 1, 2030.

M.G.L. c. 62, section 6(ff)

3.5

1.634
Qualified Internship Tax Credit

The qualified internship tax credit is available to personal income and corporate excise taxpayers who hire a qualified intern. The credit is equal to the lesser of $5,000 or 50% of the wages paid to the intern. The annual amount of credits that can be authorized cannot exceed $10,000,000. A single employer cannot claim more than $100,000 in credits in a taxable year. The credit is effective starting for the taxable year beginning on or after January 1 of the first calendar year following the next fiscal year that closes after November 20, 2024 with a consolidated net surplus of at least $400 million. The credit expires on January 1 of the sixth tax year following the effective date of the credit.

M.G.L. c. 62, § 6(ii)

N.A.

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