2015, 2016 Massachusetts earned income tax credit MA EITC

By | January 3, 2016

A refundable earned income credit is available to certain low-income individuals who have earned income and meet certain federal requirements for the federal earned income credit. Taxpayers must qualify for and claim the federal earned income credit allowed under I.R.C. § 32 as amended and in effect for the taxable year. Taxpayers may claim the credit even if they do not have a filing requirement. To receive the credit, taxpayers must file tax returns and claim the credit.


What is Massachusetts tax credit (EIC)?

When you qualify for the federal EITC, you automatically qualify for a Massachusetts tax credit (EIC) that will give you an extra 15% of your EITC check. $3359 turns into $3863! The Massachusetts refundable credit is 15% of the computed federal credit. The state Earned Income Tax Credit (EITC) is a refundable tax break provided by the Commonwealth to lower-income workers in order to increase the after-tax rewards to work. It is available only to tax filers with earned income and provides benefits primarily to workers with children (to learn more about this and other programs affecting Massachusetts children, see MassBudget’s Children’s Budget).


Who can get the Massachusetts Earned Income Tax Credit

An individual is not eligible for the earned income credit if he or she has “investment income” exceeding certain thresholds. Investment income includes capital gain net income, net passive income, interest, dividends, tax exempt interest and non-business rents and royalties. (See U.S. Publication 596, 2002) For 2014, investment income must be $3,350 or less for the year.

How much is 2015 Massachusetts earned income tax credit ?

Your EITC check depends mainly on your family size and your 2015 earned income. If your family has And you earned less than Then you can get up to No “qualifying children” (see box) $14,820 $503 One qualifying child $39,131 $3,359 Two qualifying children $44,454 $5,548 Three or more qualifying children $47,747 $6,242 Note: TAFDC, alimony and child support payments are not earned income and do not count towards the income limits.

Who is a qualifying child for the Massachusetts EITC?

A “qualifying child” can be your… • Biological or adopted child • Stepchild • Foster child… or a descendent of any of them, such as your grandchild • Brother or sister • Stepbrother or stepsister… or a descendent of any of them, such as a niece or nephew. A “child” must be younger than you; not have fi led a joint return other than to claim a refund; and be under19, unless they are a full-time student under 24, or any age.


What are Massachusetts earned income tax income limits?

Learn more details and file for your tax credits at a free tax assistance site near you. There are about 300 in Massachusetts open during tax season.

The largest credits are provided to married joint filers earning between approximately $14,000 and $24,000 a year (in 2016), and who have three or more children. The value of the credit declines slowly as family income rises and disappears entirely for families earning more than about $45,000-$55,000, depending on marriage/filing status. Far smaller credits are available to very low-income filers who do not have children. The value of the credit is applied toward the filer’s tax liability and any amount that exceeds taxes owed is refunded to the filer through direct payment from the Commonwealth.


Will the EITC affect my benefits?

In Massachusetts, getting the federal EITC and the state EIC tax credit will not affect your eligibility for TAFDC, SNAP, Medicaid, SSI, or low-income housing. (EITC and EIC do not count as income in determining eligibility for these benefits.)

Claiming the Massachusetts Earned Income Tax Credit

Taxpayers who choose to have the IRS compute their federal earned income credit should wait until the IRS notifies them of that amount before claiming the credit on the Massachusetts income tax return. If they have not received the federal earned income credit amount as computed by the IRS by the deadline for filing Massachusetts tax return, they may file a Massachusetts Form 4868, Application for Automatic Six-Month Extension of Time to File Massachusetts Income Tax Return pdf format of Form M-4868 .