Massachusetts October Legislative Update

October 2, 2023

Massachusetts October Legislative Update

Taxes The long-awaited tax relief package was fast-tracked through the House and Senate last week then signed by Governor Healey. The final package includes:

An estate tax exemption increases from $1 to $2 million, and the elimination of the cliff effect.
Reduction in the short-term capital gains tax from 12% to 8.5%.
Establishes a single sales factor apportionment based solely on receipts.
Increases child and dependency tax credits to $440.
Raises earned income tax credit from 30% to 40% of the federal credit.
Increases senior circuit breaker tax from $1,200 to $2,400.
Increases renters deduction from $3,000 to $4,000

But the changes were not all positive. The bill also modifies the 62F rebate law to change the way funds are rebated to taxpayers. Many will recall Massachusetts revenue collections triggered rebates of 14% of a taxpayers’ income tax liabilities last year. The tax package mandates all future revenue overedges be redistributed equally amongst taxpayers no matter how much was paid to the state. The tax bill also demands married couples who file jointly for federal purposes, also do so for their state returns. Paid Family Medical Leave As per statute, the Department of Family and Medical Leave posted that next year’s PFML contribution rate will increase from 0.63% to 0.88%. According to state officials the increase is a result in higher utilization of the paid family and medical leave benefit in 2023. Minimum Wage NFIB testified at a hearing last week on raising the minimum wage to $20 per hour. In his testimony to legislators, state director Christopher Carlozzi emphasized a recent NFIB study showing the wage hike could cost the state 23,000 jobs and $3.4 billion in economic output loss if passed. Disproportionately impacted smaller employers. NFIB also opposed bills increasing the overtime threshold for salaried workers to $64,000, reinstating premium pay on Sundays and holidays, and phasing out the tipped wage. We did, however, support the legislation allowing for a teen/training wage in Massachusetts.

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Massachusetts

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