Alyssa Specht & Samantha Binning •
On October 4, 2023, Massachusetts signed House Bill 4104 which includes significant corporate excise and personal income tax legislation. This bill includes changes to the apportionment formula, short-term capital gains rate, estate tax exemption, and more. You may be wondering what this means for your Massachusetts taxes so let’s break it down.
On October 4, 2023, Massachusetts signed House Bill 4104 which includes significant corporate excise and personal income tax legislation. This bill includes changes to the apportionment formula, short-term capital gains rate, estate tax exemption, and more. You may be wondering what this means for your Massachusetts taxes so let’s break it down.
In general, an apportionment formula is used to calculate the portion of a business’s income which is subject to business or excise taxes of a particular state. Massachusetts’s apportionment formula was calculated by using three factors: payroll, property and sales. Starting in the beginning of the 2025 tax year, the formula will only be based on sales.
Short-term capital gains arise from the sale of assets held for a year or less. In Massachusetts, the gains are typically taxed at 12 percent. However, starting in 2023, the short term capital gains rates for individuals are being reduced from 12% to 8.5% resulting in less tax liability!
Retroactive to January 1, 2023, the Massachusetts estate tax exemption will be increased from $1 million to $2 million. Massachusetts resident decedents with taxable estates being valued at $2 million or more will be required to file a Massachusetts estate tax return. These are considerations apply to real or tangible personal property owned outside of Massachusetts. Non-residents who own such property in Massachusetts must also take this change into account.
Beginning in 2024, individual taxpayers must file a joint MA return for any year in which they file a joint federal return. Meaning, if you’re married and file jointly for federal taxes you now have to file jointly for Massachusetts.
Overall, this tax relief bill came with many changes for Massachusetts taxpayers. If you would like to learn more about the bill and the other tax relief items in it, please reach out to Mason + Rich, CPA’s!
Short-term capital gains arise from the sale of assets held for a year or less. In Massachusetts, the gains are typically taxed at 12 percent. However, starting in 2023, the short term capital gains rates for individuals are being reduced from 12% to 8.5% resulting in less tax liability!
Retroactive to January 1, 2023, the Massachusetts estate tax exemption will be increased from $1 million to $2 million. Massachusetts resident decedents with taxable estates being valued at $2 million or more will be required to file a Massachusetts estate tax return. These are considerations apply to real or tangible personal property owned outside of Massachusetts. Non-residents who own such property in Massachusetts must also take this change into account.
Beginning in 2024, individual taxpayers must file a joint MA return for any year in which they file a joint federal return. Meaning, if you’re married and file jointly for federal taxes you now have to file jointly for Massachusetts.
Overall, this tax relief bill came with many changes for Massachusetts taxpayers. If you would like to learn more about the bill and the other tax relief items in it, please reach out to Mason + Rich, CPA’s!
RSS Feed