Technical Information Release TIR 22-5: Tax Provisions in Recent Massachusetts Legislation

Date: 03/18/2022 Referenced Sources: Massachusetts General Laws

This Technical Information Release (“TIR”) explains certain provisions included in “An Act Enabling Partnerships for Growth” (the “Economic Development Act”), [1] “An Act Making Appropriations for the Fiscal Year 2022 for the Maintenance of the Departments, Boards, Commissions, Institutions and Certain Activities of the Commonwealth, for Interest, Sinking Fund and Serial Bond Requirements and for Certain Permanent Improvements” (the “FY22 Budget”), [2] and “An Act Relative To Immediate COVID-19 Recovery Needs” (the “Recovery Act”) [3] . The provisions relate to the personal income tax, G.L. c. 62, the corporate excise, G.L. c. 63, the new pass-through entity tax, G.L. c. 63D, and administrative procedures for the sales and use tax and the room occupancy excise.

The following provisions are discussed in this TIR:

Provisions Affecting Business Taxpayers:

New Optional Pass-Through Entity Excise

Changes to Advance Payment Requirement

Tax Treatment of COVID-Related Small Business Relief Received from a Program Administered by the Massachusetts Growth Capital Corporation

New Cranberry Bog Renovation Credit

New Disability Hire Credit

Changes to the Film Incentive Credits

Changes to the Low-Income Housing Credit

Extension of the Massachusetts Historic Rehabilitation Credit

Repeal of Certain Deductions and Credits

Provisions Affecting Individual Taxpayers:

Deductions for Dependent Care Expenses and Certain Dependents Converted into Credits

Tax Treatment of Federal COVID-Related Relief Programs

Delay in Reinstatement of the Massachusetts Charitable Contribution Deduction

Deduction for Contributions to a Massachusetts 529 College Savings Plan or Prepaid Tuition Program Made Permanent.