Governor Healey has signed into law a $ 1 billion tax reform package intended to provide relief to individuals and families to address issues related to the cost-of-living affordability in the commonwealth, as well as improve the competitive economic position of Massachusetts to attract businesses and workers.
To achieve affordability goals, the bill would combine two existing tax credits — for child care and dependent care — into one, and would allow taxpayers to claim $310 per dependent in the first year of implementation. The new credit would then jump to $440 per dependent in the second year. The bill would also double the tax credit for seniors who rent or own in Massachusetts from $1,200 to $2,400, raise the deduction for renters from $3,000 to $4,000, and increase the state’s Earned Income Tax Credit — designed to help low-income families — from 30 percent to 40 percent of the federal credit.
To increase the state’s competitive position, the bill would reduce the tax rate on short-term capital gains, which stem from the sale of assets held for a year or less, from 12 percent to 8.5 percent and modify and simplify how the state calculates taxes owed by multistate companies by relying solely on the amount of a company’s sales within the state.
Finally, the bill would modify the estate tax credit by effectively doubling the threshold at which the levy is triggered from $1 million to $2 million.
Commenting on the new law, Tara Gregorio, President, Massachusetts Senior Care Association said “Governor Healey, Lt. Governor Driscoll, President Spilka, Speaker Mariano and the entire Legislature are to be commended for their outstanding leadership and unwavering commitment to working families, seniors and our deserving frontline caregivers who will benefit significantly from the child care, rental and earned income tax credits contained in this historic legislation. The Massachusetts Senior Care Association extends our deepest appreciation to Governor Healey, Lt Governor Driscoll, President Spilka and Speaker Mariano for their steadfast advocacy on behalf of the individuals who live and work in the Commonwealth’s long term care facilities.”