“Tax cuts are here and everyone is going to benefit from them,” Massachusetts Gov. Maura Healey said Wednesday after she signed into law the state’s first tax cuts in two decades.The governor and lawmakers said the $1 billion tax relief plan will put more money in taxpayers’ wallets and make Massachusetts more competitive. “I’m confident that this tax reform legislation will help to make Massachusetts more affordable for all residents, while also helping to make the Commonwealth more competitive with other states,” said Speaker of the House Ron Mariano.”It puts real dollars back into the bank accounts of working families, relieves financial strains for our young professionals, puts meaningful incentives into developing affordable housing, and will keep our state competitive for businesses who will invest in our workforce,” said Senate President Karen Spilka.Under the new law, Massachusetts’ child and dependent tax credit will become the biggest in the nation, increasing from $180 per dependent to $310 in taxable year 2023 and then $440 in 2024 and beyond.”Massachusetts now has the most generous, universal child and dependent care tax credit in the entire country,” Healey said. Legislative leaders said the total impact of the measure for fiscal year 2024 will be $561.3 million. By 2027, when the changes are fully phased in, they say the total impact will be $1.02 billion.A uniform credit of $99,600 on estate taxes will reduce the tax for all residents and eliminate it for all estates under $2 million.The deal increases the earned income tax credit from 30% to 40% of the federal credit, doubles the maximum senior circuit breaker credit from $1,200 to $2,400, increases the rental reduction from $3,000 to $4,000 and slashes the tax rate on short-term capital gains from 12% to 8.5%.Under the deal, homeowners will have access to a septic system tax credit maximum that will increase from $6,000 to $18,000, with a maximum of $4,000 claimable per year, and increased credits for lead paint abatement.”We’re also cutting taxes and saving money for commuters by making public transit, regional transit authorities and bicycle expenses deductible,” Healey said. The measure also includes requiring married taxpayers who file a joint return with the federal government to also file a joint state return.”We wanted to provide something that was a little more balanced, a little more equitable across the board,” said House Ways and Means Chairman Rep. Aaron Michlewitz.Competing tax relief plans from the House and Senate died in 2022 when the Legislature was surprised by a surplus that triggered tax rebates under state law. Legislative leaders say the new law also includes changing that law, known as Chapter 62F, to require that payments be made equally amongst taxpayers. Earlier this year, legislators allotted $581 million for tax relief in the fiscal year 2024 budget.

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