BOSTON (AP) — Massachusetts lawmakers on Tuesday unveiled a tax relief package aimed at providing $561 million in cuts to taxpayers and businesses in the current fiscal year through a series of tax credits and other measures aimed at reducing the tax burden.
The proposal — which would reach $1 billion in tax relief by fiscal 2027 when fully phased in — includes more than a dozen specific tax proposals, ranging from eliminating the tax on estates under $2 million to increase the tax credit for children and dependents from $180 to $2 million. $330 per child or dependent for the current tax year to $440 for the 2024 tax year.
Lawmakers say the expanded child tax credit will benefit 565,000 families and will be the most generous universal child and dependent care tax credit in the country.
The bill would also increase the rent deduction cap from $3,000 to $4,000, reduce the short-term capital gains tax rate from 12% to 8.5% and allow cities and towns to adopt a local property tax exemption to encourage affordable housing.
Democratic Senate President Karen Spilka called the proposal historic.
“This is the largest bipartisan tax relief legislative proposal in more than a generation,” Spilka said. “This tax relief bill will help alleviate many, many financial burdens our families, seniors and renters face and put real money in their pockets. »
A low-income household with two children will see their tax refund check increase by more than $1,000 if the bill becomes law, she said.
“It’s real money,” she added.
House Speaker Ronald Mariano, a fellow Democrat, also praised the bill, particularly the provision that boosts the maximum senior citizen circuit breaker tax credit from $1,200 to $2,400, a credit refundable for seniors based on property taxes or rent paid on residential properties owned. or rented as a primary residence.
“This is one of the biggest programs we’ve ever put together since I’ve been in the state, where you can actually get money to stay in your home, even if you don’t pay taxes. state taxes,” Mariano said.
The bill is expected to be voted on Wednesday in the House and Thursday in the Senate.
If the request is approved, the next stop will be Governor Maura Healey’s office for her signature.
Healey called the tax relief essential to making Massachusetts “more affordable, competitive and equitable.”
“This is a comprehensive package that provides relief to families and businesses, including through our proposed Child and Family Tax Credit,” Healey said in a written statement. “I can’t wait to review the details.”
Healey released his own $742 million tax relief package in February. His proposal would have eliminated the tax on estates valued up to $3 million. Massachusetts is one of 12 states with an inheritance tax.
In April, lawmakers in the Massachusetts House overwhelmingly approved their own $654 million tax relief package, followed by the Senate, which unveiled a $590 million tax relief proposal in June.
The single compromise bill up for a vote this week would also make changes to a 1986 law designed to limit the growth of state tax revenue and return any surplus to taxpayers. The law triggered nearly $3 billion in refunds last year.
The bill would maintain the law but ensure the money is distributed equally among taxpayers, lawmakers said.