BOSTON (State House News Service) —Senate Democratic leaders on Monday afternoon plan to release their version of a roughly $500 million tax cut package that would kick in a full year before the House-backed changes and take a different approach to estate tax reform that would cost the state $22 million less.
House and Senate leaders announced an agreement last week on a framework for tax relief that included $500 million in rebates by October and $500 million in additional reforms. The House passed its bill on Thursday, but the Senate tax plan, which will be included in a broader economic development bill, proposes that the policy changes take effect for the 2022 tax year, rather than 2023, an official familiar with the bill told MASSterList.
This would mean taxpayers could take advantage of things like the expanded child care tax credits and credits for renters, when they file their taxes next spring and not have to wait until the following year.
The approach recommended by Senate leaders would also create a tax credit of $99,600 on all estates, effectively eliminating all taxes and the "cliff effect" on estates worth up to $2 million. In contrast, the House last week voted to increase the estate tax trigger from $1 million to $2 million and to apply the tax to only the value of an estate above $2 million rather than the full amount.
The Senate plan, according to estimates, would impact roughly 2,500 estates and cost the state $185 million, or about $22 million less than the House plan. Child and dependent credits, the earned-income tax credit expansion, rental deductions and increases in the senior circuit breaker all mirror the House bill, the official said. - Matt Murphy/SHNS | 7/18/22 8:24 AM
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