(Boston—6/22/23) Senator Paul R. Feeney (D-Foxborough) announces the successful passage of a $590 million Tax Relief bill which delivers support to low- and middle-income earners and chips away at the headwinds that threaten Massachusetts’ competitiveness. Focusing on providing relief to residents across Massachusetts while upholding fiscal responsibility, the Senate's tax relief package will provide relief to renters, seniors, and parents struggling with high early education costs while also increasing much-needed housing production. With the recent passage of the FY24 budget last month, the Commonwealth is now poised to secure and strengthen its economic foundation to weather future uncertainty. 

“Last week my colleagues and I voted to pass a tax relief package to mitigate financial constraints facing Massachusetts residents and communities. As the cost of food, housing, clothes and essentially all goods continue to rise, Commonwealth residents are feeling the squeeze and we must respond to keep Massachusetts a competitive and vibrant home for working-class residents who are the lifeblood of our workforce. From expanding housing opportunities, offering balanced relief to hard-working residents, and supporting our local workforce, this tax relief package seeks to improve the quality of life for all Massachusetts residents trying to make ends meet, said Senator Feeney.     

This package includes a variety of initiatives as tax relief for the residents of Massachusetts. The bill: 

• increases the Earned Income Tax Credit (EITC), which provides critical support to working families, from 30% to 40% of the federal credit  

• merges existing credits into a new and enhanced Child and Dependent Tax Credit (CDTC), increases the amount of the credit from $180 to $310 per child/dependent, and eliminates the current cap of two children/dependents 

• increases the cap on the rental deduction from $3,000 to $4,000 

• raises annual authorization of the Low Income Housing Tax Credit, which directly supports the production of affordable housing units across the Commonwealth, from $40 million to $60 million  

• doubles the maximum senior circuit breaker credit, which supports elderly residents who struggle with high housing costs, from $1,200 to $2,400  

• excludes homes valued at under $2 million from the Estate Tax and eliminates the “cliff effect” by allowing a uniform credit of $99,600 for all estates 

• triples the maximum credit under the Title V Tax Credit, which supports families who must replace failed septic systems, from $6,000 to $18,000, and lifts the amount claimable to $4,000 per year 

• increases the statewide cap for the Dairy Tax credit from $6 million to $8 million 

• expands eligible occupations for the Apprenticeship Tax Credit  

• doubles the credit for lead paint abatement to $3,000 for full abatement and $1,000 for partial abatement 

• expands the types of alcoholic drinks which qualify for a lower tax rate as part of the cider tax 

The Housing Development Incentive Program 

During debate of the Senate Ways and Means Tax Proposal, Senator Feeney rose to speak in support of expanding the Housing Development Incentive Program (HDIP) as an essential lifeline for our communities to incentive market-rate housing, create balance in housing production and support working-class residents. HDIP is one of the most important leveraging tools our cities have to attract developers, and it is critical that the program remains flexible to cater to the unique economic development and housing needs of the Commonwealth’s 26 Gateway Cities – including in the city of Attleboro.   

“It is no secret that the Commonwealth is facing a staggering housing crisis in all corners of the State. We need to increase and incentivize housing developments of all kinds, and I believe strongly that expanding the Housing Development Incentive Program, known as HDIP, is a significant tool at our disposal to keep Massachusetts competitive, support middle class residents, and bolster economic development in our Gateway Communities,” said Senator Feeney. 

The tax proposal takes steps to expand opportunity for additional market-rate housing by increasing the HDIP statewide cap from $10 million to $57 million on a one-time basis and then to $30 million annually.  

“The bottom line is that we need more housing, on all fronts, and we need it now. We should be listening to our elected and community leaders from Gateway Cities to make sure we’re getting this right, and I am grateful to Attleboro Mayor Cathleen DeSimone for her partnership and staunch advocacy in support of HDIP,” added Feeney.  

Additional Legislative Highlights 

Notably, this legislation ensures that student loan payment assistance offered by employers will not be treated as taxable compensation. The bill also adds regional transit fares and bike commuter expenses to the allowable commuter expenses eligible for favorable tax status.  

To encourage affordable housing, the bill gives municipalities the option of adopting a local property tax exemption for real estate that is rented to a person below a certain area-dependent income level. 

Additionally, the bill also directs the following studies: 

• A study by the Executive Office of Administration and Finance on the feasibility of making advance quarterly payments of the Child and Dependent Tax Credit 

• A study by the Department of Revenue on the efficacy of an additional, elective entity-level tax of up to 4 percent on a portion of qualified taxable income in the Commonwealth, coupled with a refundable credit, for eligible pass-through entities 

As different versions of this legislation have passed the Senate and the House of Representatives, a conference committee will now be appointed to resolve differences between the two bills.  

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