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Recent changes to personal income tax filing in Massachusetts

On Behalf of | Mar 11, 2022 | Internal Revenue Service

On February 10, 2022, the Commonwealth of Massachusetts Department of Revenue announced changes to the upcoming tax season. These changes pertain to Chapter 62 personal income tax filing and deductions. Here are highlights of some of the main changes.

Updated due date to file personal taxes

According to Massachusetts General Laws (“MGL”) ch 62C § 6, individuals have to file their personal tax returns by the fifteenth day of the fourth month. For 2021 income tax returns, people in Massachusetts now have until April 19, 2022, to file. This change is to account for the holidays of Emancipation Day, celebrated in Washington, D.C. on April 15, 2022, as well as Patriots’ Day in Massachusetts, which falls on April 18, 2022.

Eligible Dependent Care Tax Credit (DCTC)

Individual taxpayers who are subject to tax under MGL chapter 62 are eligible to receive the Dependent Care Tax Credit beginning with tax year 2021. This new credit takes the place of the former Dependent Care Deduction, repealed beginning January 1, 2021.

The new DCTC relates to employment-related costs to care for a dependent child under 13 years old. The credit also extends to disabled dependents and disabled spouses that individuals claim on their personal tax returns.

New Household Dependent Tax Credit (HDTC)

Those who have a household as explained in IRC § 21 are able to claim the HDTC. This credit takes the place of the former deduction for household dependents, also repealed beginning January 1, 2021.

In IRC § 152, it stipulates that a household which has dependents who are under 12 years old, at least 65 years old or more, or disabled. The credit equals $180 for one dependent and $360 for two plus dependents.

Updated taxing guidelines for unemployment compensation

Another new change allows that as of January 1, 2021, up to $10,200 of unemployment benefits income will be deducted from federal gross income. This change pertains to individual taxpayers who have a total household income that doesn’t exceed 200% of the federal poverty level. Technical Information Release TIR 21-6 explains the specifics of this update.

New permanent deduction for eligible prepaid tuition or college savings plans

Individuals who contribute to certain educational funds are able to deduct some contributions to those funds. Previously, this was a temporary deduction, but legislation made permanent the deduction. This relates to prepaid tuition programs or a Massachusetts 529 college savings plan.

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