The first checks and direct deposits of $3 billion in excess tax revenue will accrue to Massachusetts taxpayers starting Tuesday, when the calendar officially shifts to November.
A spokesman for the Executive Office of State Administration and Finance said on Friday the money will come out under the voter-approved tax cap law known as Chapter 62F, which the taxpayers triggered for the first time since 1987 by paying massive amounts of taxes. About 3 million taxpayers will receive a refund in the form of a mailed check or direct deposit worth about 14% of what they owed in personal income tax in 2021, said the spokesperson.
Here are answers to some frequently asked questions about the program:
What is Chapter 62F?
Chapter 62F is a general Massachusetts law that requires the state Department of Revenue to provide a credit to taxpayers if total tax revenue in a given fiscal year exceeds an annual cap tied to growth in wages and salaries in the Commonwealth.
How much will my tax refund be?
The money will be returned to eligible taxpayers by the State Department of Revenue on a pro-rata basis of their Massachusetts personal income tax incurred in the prior tax year – Tax Year 2021.
The administration said Friday that eligible taxpayers will receive a credit in the form of a refund of approximately 14% of their personal income tax for the 2021 Massachusetts tax year.
The Baker administration has set up a website, www.mass.gov/62frefunds, where you can get a preliminary estimate of your refund. A call center is also now available at 877-677-9727 to answer questions about Section 62F taxpayer refunds. It is open Monday to Friday from 9 a.m. to 4 p.m.
The credits are subject to offsets, state officials said, including for unpaid taxes, unpaid child support and certain other debts.
Who can benefit from a tax reduction?
To be eligible for a refund, the administration said individuals must have filed a 2021 state tax return by October 17, 2022. An individual’s credit may be reduced due to interceptions reimbursement, including for unpaid taxes, unpaid child support and certain other debts.
Please note that :
- Both resident and non-resident filers are eligible
- Non-residents on whose behalf a partnership files on a composite basis are eligible
- Fiduciary filers (trusts and estates) are eligible
A state surplus could mean tax relief for residents, but it hasn’t.
How and when will I be reimbursed?
Those eligible for a refund will automatically receive it in the form of a check sent by mail or by direct deposit. The distribution of refunds is expected to begin on November 1.
No action is necessary to receive your refund.
Will refunds be treated as taxable income?
Refunds are not taxable as income at the state level.
All tax refunds, including 62F refunds, are federally taxable only to the extent an individual has claimed itemized deductions on their federal return for the 2021 tax year. Refund recipients who have on their 2021 federal returns will receive a Form 1099-G from the Department of Revenue by January 31, 2023 to use to complete their 2022 federal return.
The administration plans to distribute refunds on a rolling basis through Dec. 15. The administration had previously estimated refunds of about 13% of income tax debts.
Taxpayers who owed personal income tax last year and have already filed their 2021 return are eligible and do not need to take any further steps to receive their refunds.
Information from the State House News Service and Mass.gov has been included in this report.
