In spite of the fact that it is the second month of the new legislative session, Gov. Maura Healey and senior Beacon Hill budget writers are interested in providing permanent tax relief to Bay Staters.
Last year, lawmakers were ready to pass a number of permanent tax code changes, including raising the child and dependent care tax credits, the senior circuit breaker tax credit, and the rental deduction cap, as well as overhauling the estate tax and short-term capital gains tax, before a mostly forgotten tax cap law from the 1980s thwarted their efforts due to affordability concerns according to an article published by Mass Live on February 09, 2023.
Healey’s child and family tax credit, dubbed the “centerpiece” of the governor’s much awaited tax reform plan by administration officials, would provide a $600 refundable credit for all dependents, including kids under the age of 13, persons with disabilities, and seniors 65 and older.
The state would spend $458 million on the new legislation, which aims to merge and streamline the home dependent tax credit and dependent care tax credit. The present limit of two dependents for the credit is eliminated by Healey’s proposal.
The new administration would reform the estate tax as a crucial measure to increase Massachusetts’ economic competitiveness. Healey’s proposal would limit the tax to estates with a value more than $3 million. Also, a nonrefundable credit of up to $182,000 would be available as a way to combat the present estate tax’s so-called cliff effect, which sees the tax imposed at the first dollar.
The existing $1 million estate tax threshold makes Massachusetts an outlier and might force wealthy citizens out, economists and Beacon Hill lawmakers have long warned.