Economy

Here’s How You Can Calculate The Massachusetts Tax Rebate Amount

Aman Jain

Published: October 17, 2022 7:33 pm

Massachusetts will start sending the proposed tax rebate starting next month. To qualify for the tax rebate, residents must have filed their taxes by October 17, i.e., today. Also, the state has come up with an estimator to help residents calculate the Massachusetts tax rebate amount.

Massachusetts Tax Rebate: What It Is And Who Will Get It?

Last month, Gov. Charlie Baker revealed the tax rebate plan details following Auditor Suzanne Bump’s confirmation that the state needs to return excess revenue to the taxpayers.

Massachusetts registered net tax revenue of about $42 billion for the fiscal year ending on June 30, 2022. The law caps the Massachusetts tax revenue at $38.9 billion. This means the state has about a $3 billion surplus that they need to return to the taxpayers. This law (Chapter 62F) came into existence in 1986, and taxpayers already got a refund from this law in 1987.

As per the law, the Department of Revenue needs to provide a report to the state auditor regarding the net state tax revenues and allowable state tax revenues by September 1 each year. The auditor then needs to determine, on or before the third Tuesday of September, whether or not the net state tax revenue is more than the allowable state tax revenue.

To qualify for the tax rebate, residents need to file their 2021 state tax returns on or before October 17. Those who fail to file their return by October 17 cannot claim the tax rebate. It must be noted that both resident and nonresident filers are eligible for the rebate.

Eligible taxpayers will automatically get the rebate through a direct deposit or a mailed check.

How To Calculate The Massachusetts Tax Rebate Amount

The amount of tax rebate that a taxpayer will get depends on their personal income tax liability in 2021. It is estimated that an eligible taxpayer will get a refund of about 13% of their personal income tax liability. For example, an individual who paid $10,000 in income tax would get a tax rebate of around $1,300.

Taxpayers who believe they are eligible for the rebate can visit the state’s website to calculate the Massachusetts tax rebate amount. An estimator is available on the state’s website that will help filers estimate the rebate amount.

A point to note is that the calculator only gives an estimate of the rebate amount. Your actual rebate amount could be different from the estimated amount.

To use the estimator, you need to select “yes” on the left for full-year resident, or “no” on the right for part-year resident. To quickly and easily calculate the Massachusetts tax rebate amount you should have your 2021 tax return filing ready. Most of the information that the estimator needs is on your return.

This article originally appeared on ValueWalk