Massachusetts Tax Refund: Who Is Eligible and When Could Checks Run Out? -CNET | Vette Leader

Gov. Charlie Baker’s plan to send $250 checks to middle-income residents fell through last month, but Massachusetts taxpayers are still likely to get a healthy tax refund this year.

The $250 payout made progress, but a bill couldn’t pass before the July 31 deadline, in part because lawmakers were suddenly reminded of a 35-year-old voter referendum that could mean nearly 3 billion this fall US dollars in excess taxes are returned to taxpayers.

The 1986 law – which has only come into force once so far, in 1987 – stipulates that if the money collected as income tax reaches a predetermined dollar amount that exceeds the state budget, the excess must be returned to taxpayers.

Baker insisted there was enough in the coffers to support both his original $250 payout and any mandatory refunds.

“The tax breaks currently pending before the legislature are extremely affordable,” he told reporters, WBUR reported. “I mean, you’re talking about a tax year, the past year where tax revenues have increased by over 20 percent.”

Lawmakers on Beacon Hill didn’t necessarily agree.

“The fiscally responsible thing is to take a break now on all this spending,” Senator Michael Rodrigues, chair of the Senate Ways and Means Committee, told reporters Aug. 1, The Boston Globe reported.

“We want to make sure we do it right,” added Rodrigues. “We are committed to achieving real, long-term and lasting tax breaks.”

Here’s what Massachusetts residents need to know about the tax refund, including who is eligible, how much it might be, and when it might expire.

More on tax breaksfind out which states are sending out tax refunds, pausing their gas taxes and introducing sales tax “holidays”.

What will the Massachusetts tax refund be?

The refund originally proposed in Baker’s budget was $250 and was intended for individual applicants who had earned between $38,000 and $100,000 in the past year and joint applicants who had earned up to $150,000.

The exact dollar amount that could be spent now has yet to be determined: State auditor Suzanne Bump has to calculate what excess tax there is, if any, using a formula based on annual wage growth.

Baker’s office has projected that taxpayers would get a 7% refund of their income taxes for 2021, according to MassLive. For a person making $75,000, that would work out to about $250.

Couple watching tax refund audit

While the state auditor has yet to determine whether the tax receipts triggered a refund, Gov Baker predicts taxpayers will get 7% of their 2021 income taxes back thanks to a 1986 voter referendum.

Photosomnia/Getty Images

Who is Eligible for the Massachusetts Tax Refund?

In theory, anyone who paid Massachusetts income tax in 2021 would be eligible for a refund. However, residents with outstanding state tax bills may not see a check.

When will the Massachusetts tax refund be mailed?

Baker’s original plan would have had $250 checks in the hands of eligible taxpayers by October. The tax cap won’t be calculated by the state comptroller until September, although the Treasury Department could begin issuing tax credits on Sept. 21, MassLive reported.

“We are looking for the quickest and most efficient way to get this money back to the taxpayers,” Michael Heffernan, Secretary of State for Administration and Finance, told reporters on Thursday, WBZ news radio reported.

The legislator does not want to rush decisions and overwhelm the budget with several rounds of tax refunds.

Pausing economic development and the tax break package was the “wisest choice,” House Speaker Ron Mariano said at a news conference, WGBH reported.

“We wanted to make sure we’re being fiscally prudent so we know what we’re getting into,” Mariano added. “The economy is going through some strange things with a high rate of inflation [and] Oil and gas volatility that could lead to a recession.”

What other tax breaks might Massachusetts residents receive?

Legislators want to increase the income tax credit from 30% to 40%, increase the child care credit from $180 per child to $310, and increase the rent deduction cap from $3,000 to $4,000.

Certain seniors who own or rent their primary properties in Massachusetts will get a “breaker” tax credit, and Democrats want to raise the maximum from $1,170 to $2,340.

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