New MA Tax Relief Plan: What To Know

BOSTON, MA — Gov. Maura Healey unveiled a $742 million tax relief package Monday that includes a new child and family tax credit. Healey said in a statement that the proposal "provides significant savings for families, renters, seniors, farmers, commuters and more."

However, the plan also includes proposed cuts that some Democrats have criticized as helping the wealthy, The Boston Globe reported. In particular, Healey's package would cut the tax rate on short-term capital gains from 12 percent to 5 percent, a move business leaders have pushed for but some legislative Democrats said only helps the rich.

The plan is subject to approval by the Legislature. The largest part of the proposal is a child and family tax credit that will provide a $600 credit per dependent, including children under 13, people with disabilities, and senior dependents aged 65 and older. The move is expected to cost $458 million and help 700,000 taxpayers, according to Healey's statement.

State Sen. Karen Spilka called Healey's plan "exciting," although it's unclear what changes lawmakers will make.

"While the Senate will need time to dive into the details, I am particularly pleased to see support for families, parents with childcare needs, seniors, and persons with disabilities reflected in this proposal," the Ashland Democrat said. "With affordability a top concern on everyone’s minds, I look forward to continuing this conversation with my Senate colleagues and partners in the Administration and the House so that we can move forward with tax relief soon this session."

Other significant elements of Healy's proposal include:

• Increase the rental deduction capped at 50 percent from $3,000 to $4,000, which is expected to help 880,000 renters and cost $40 million.
• Eliminate the estate tax for all estates valued up to $3 million with a credit of up to $182,000. Massachusetts is one of 12 states that has an estate tax.
• Double the senior circuit breaker credit from $1,200 to $2,400 for low-income seniors with high property taxes or rent. The move is expected to help seniors in 100,000 households stay in their homes, according to Healey's statement.
• Increase the $10 million annual cap on Housing Development Incentive Program credits to $50 million in the first year, and $30 million per year moving forward. The proposal is intended for "developers to produce more market-rate housing in the state’s Gateway Cities."
• Improve access to apprenticeships by expanding the list of jobs that qualify for employer tax credits and doubling the statewide cap on credits to $5 million.
• Add regional transit passes and bike commuter expenses, such as bike-share memberships, purchases, and storage, to those that qualify for tax deductions.
• Exempt employer assistance with student loan repayment from income taxation for student borrowers.
• Extend the brownfields tax credit program, currently set to expire in 2023, through 2028, allowing taxpayers to claim a credit for costs related to the cleanup of contaminated properties.
• Help the state's dairy farmers by increasing the statewide cap from $6 million to $8 million, thereby protecting farmers from fluctuations in wholesale milk prices.

The wide-ranging proposal also includes support for live theater, cider producers, and septic tank repair.