As tax season is now upon us, it’s important to note the ever-changing landscape that is tax law. As we approach the 2024 filing season, the following changes are most notable:
- A married couple filing a joint federal income tax return must now file a joint state income tax return. Previously, couples were able to file joint federal returns and separate state income tax returns, which incentivized high income couples who both receive income to file separately in Massachusetts to avoid the 4% surcharge (Millionaire’s Tax) on up to another $1,000,000 of income return.
- Short-term capital gains will now be taxed at 8.5%, a reduction from the previous 12%.
- Parents of children or caretakers for disabled adults or seniors have access to the updated Child and Family Tax Credit. For the 2024 tax year and all others moving forward, they can claim $440 per dependent. The law also got rid of the two-dependent cap on the credit when it was first signed. So, this spring, for example, a family with four dependent children could claim $1,760, up from $360 before the law was passed.
- For 2024, individuals over the age of 18 must obtain health insurance that meets the Minimum Creditable Coverage (MCC) as defined by MA Health Connector. Penalties are imposed monthly and based upon monthly insurance premiums that the individual would have qualified for.
- Effective for tax years beginning on or after January 1, 2024, the Act repealed Mass. Gen. L. Ch. 62 § 3.B(a)(6) which formerly allowed amounts of interest and dividends from Massachusetts banks to be excluded from Massachusetts Part B taxable income. The former deductions were $100 for a single person, head of household or a married person filing a separate return, or $200 for a husband and wife filing a joint return, from savings deposits, savings accounts, shares or share savings accounts that are in a Massachusetts bank.