1.400 Deductions from Adjusted Gross Income

Deductions from Adjusted Gross Income

1.400

789.2

878.6

1,205.1

1,240.1

1,281.6

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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.

M.G.L. c. 62, § 3B(a)(3)

341.4

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.

M.G.L. c. 62, § 3B(a)(4)

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).

M.G.L. c. 62, §§ 3B(b)(1)(C), (1A)(C), and (2)(C)

34.3

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).

M.G.L. c. 62, §§ 3B(b)(1)(B), (1A)(B), and (2)(B)

0.6

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.

M.G.L. c. 62, § 3B(a)(8)

N.A.

1.407
Personal Exemption for Students Age 19 or Over

Massachusetts provides a $1,000 personal income tax exemption for each of a taxpayer's dependent children. Generally, the exemption is available for children aged 18 or under and qualifying relatives. That exemption is not treated as a tax expenditure. However, as a result of conformity with the federal definition of "dependent," the exemption is also available for children who are full-time students between the ages of 19 and 23. That portion of the exemption is treated as a tax expenditure.

IRC §§ 151-152; M.G.L. c. 62 § 3B(b)(3)

10.6

1.408
Deduction for Adoption Fees

Adoption fees paid to a registered adoption agency are deductible against Part B income.

M.G.L. c. 62, § 3B(b)(5)

0.3

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.

IRC § 21, and M.G.L. c. 62, § 3B(a)(7)

N.A.

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.

IRC § 213 and M.G.L. c. 62, § 3B(b)(4)

206.6

1.411
Rental Deduction

Renters may deduct one-half of the rent paid for a principal residence located in Massachusetts up to a maximum deduction of $3,000 per year. The deduction is available to all renters, regardless of age or income.

M.G.L. c. 62, § 3B(a)(9)

191.0

1.412
Nontaxation of Charitable Purpose Income of Trustees and Estates

Trusts and estates subject to the personal income tax an deduct trust or estate income that is currently payable to or irrevocably set aside for charitable purposes.

M.G.L. c. 62, §§ 3A(a)(2), 3B(a)(2), and 3C(a)(2)

15.9

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 deductible from gross income.

M.G.L. c. 62, § 2(b)(1)(A); M.G.L. c. 62, § 3B(a)(6)

Expired

1.414
Tuition Deduction

A deduction is allowed for tuition payments made by taxpayers, for themselves or their dependents, for programs that would lead to a degree or certificate from a two or four-year college. The deduction is equal to the amount by which the net tuition payments exceed 25% of the filer's Massachusetts adjusted gross income.

IRC § 222; M.G.L. c. 62, § 3B(a)(11)

17.7

1.415
Charitable Contributions and Gifts

Corporations are permitted to deduct charitable contributions for purposes of determining the net income measure of the corporate excise. Beginning with 2023 tax years, individuals will be permitted to deduct contributions to § 501(c)(3) organizations for personal income tax purposes.

M.G.L. c. 62, § 3(B)(a)(13); IRC § 170

338.8

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.

IRC §§ 62(a)(20) and 62(e)

N.A.

1.419
Business Expenses of National Guard and Reserve Members

Due to Massachusetts' reliance on the Internal Revenue Code (Code) for determining employee business expense deductions, Massachusetts allows a personal income tax deduction for travel expenses incurred by National Guard and Armed Forces reserve members who must travel more than 100 miles from their homes to their assigned posts.

M.G.L. c. 62, § 2(d)(1); Code § 62(a)(2)(E)

1.6

1.420
Archer Medical Savings Accounts

Due to Massachusetts' reliance on the Internal Revenue Code ("Code") for purposes of determining income, eligible contributions to, earnings in, and qualified distributions from Archer medical savings accounts ("Archer MSAs") are not subject to the personal income tax.

M.G.L. c. 62, §§ 1(c), 1(d), and 2(d)(1); IRC § 220

Negligible

1.421
Deduction for Clean-Fuel Vehicles and Certain Refueling Property

A deduction is allowed for a portion of the cost of qualifying motor vehicles that use clean- burning fuel placed in service on or before December 31, 2006. The deduction exists in Massachusetts because it was present in the Code as of 1/1/05. The federal deduction was repealed in 2014.

IRC §§ 62(a)(14) and 179A

Expired

1.422
Health Savings Accounts

Due to Massachusetts' reliance on the Internal Revenue Code (Code) for purposes of determining income, eligible contributions to, earnings in, and qualified distributions from health savings accounts (HSAs) are not subject to the personal income tax.

M.G.L. c. 62, §§ 1(c), 1(d), and 2(d)(1); IRC § 223

7.4

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.

M.G.L. Chapter 62, Sec. 3 (B) (a) (15)

19.5

1.424
Self-Employed Health Insurance Deduction

Due to Massachusetts' adoption of the trade or business expense deductions allowed under the Internal Revenue Code ("Code"), Massachusetts allows a deduction for health insurance expenses incurred by self-employed taxpayers.

IRC § 162(l), M.G.L. c. 62, §1(l), § 2(d)(1)

49.5

1.425
Deduction for Employer Payments of Employee Qualified Education Loans

Massachusetts allows two alternative deductions for student loan interest. The first is based on the deduction for student loan interest allowed under the Internal Revenue Code (Code). The Code allows a deduction of up to $2,500 of interest paid on loans used to pay for undergraduate or graduate education, subject to income limitations. The second deduction applies to interest on undergraduate student loans, which is not limited in amount and is not subject to income limitations. Taxpayers cannot take both deductions for the same interest payments.

M.G.L. c. 62, §§ 2(d)(1), 3B(a)(12); I.R.C. § 62(a)(17), § 221

17.5

1.426
Expenses of Human Organ Transplant

Resident individuals that donate specified organs to another person may deduct certain expenses relating to the donation on their personal income tax returns.

M.G.L. c. 62, § 3B(a) (16)

Negligible

1.427
Prepaid Tuition or College Savings Plan Deduction2

A 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 originally applied to tax years beginning on or after January 1, 2017 through the tax year beginning on January 1, 2021. The FY22 Budget amends St. 2016, c. 219, § 138 to eliminate the expiration, making the deduction permanent. See TIR 22-5 for further information.

G.L. c. 62, § 3.B(a) paragraph (19)

3.7

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)

16.8

1.429
Moving Deduction

Filers who moved due to a change in their job or business location or to start a new job or business can deduct reasonable unreimbursed moving expenses if all of the following requirements are met: 1) The move was closely related to the start of work; 2) It meets a distance test; and 3) It meets a time test. Under the TCJA, a deduction for moving expenses is no longer allowed except for certain members of the Armed Forces; However, Massachusetts does not adopt this change. A deduction for moving expenses continues to be allowed if the above requirements are met as Massachusetts follows the Code as in effect as of January 1, 2024.

IRC § 217

1.3

1.430
Deduction for Student Loan Payment Assistance

For tax years beginning on or after January 1, 2023, employees may deduct employer payments of principal or interest on a qualified education loan during the taxable year that has not already been excluded from their federal gross income. The deduction is substantially identical to the federal exclusion from gross income provided by IRC § 127(c)(1), which Massachusetts follows as amended on January 1, 2022 and in effect for the taxable year. However, while IRC § 127(c)(1) is limited to $5,250 per employee and applies only to employer payments made before January 1, 2026, the new Massachusetts deduction is not subject to a dollar limit nor does it have a sunset date. Employees claiming the deduction may not claim any other deduction, such as for student loan interest, for the same amounts paid by their employer.

M.G.L. c. 62, § 3(B)(a)(20)

5.6

1.431
Whistleblower Attorneys' Fees Deduction

Due to Massachusetts' conformity with IRC § 62(a)(21), Massachusetts allows taxpayers to exclude from gross income attorney fees and court costs associated with whistleblower suits brought under the Securities Exchange Act of 1934, any state false claims act, or under the Commodity Exchange Act.

IRC § 62(a)(21)

1.6

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