Tax Credits
- Federal and Massachusetts -

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Click on a program name for more information:

Federal tax credits and Massachusetts state tax credits help Massachusetts residents save money at tax time. Tax credits can lower the amount of tax you owe or, in some cases, give you a cash payment even if you don't owe any taxes. The Earned Income Credit and Child Tax Credit offer substantial benefits to low and moderate income working families and families with children. Homebuyers, people paying for college, elderly homeowners and renters, and other residents of Massachusetts can also save hundreds or thousands of dollars with tax credits.

Earned Income Credit

The Earned Income Credit (also called the Earned Income Tax Credit) is a federal tax credit that lowers taxes and/or gives a refund payment to low and moderate income workers who qualify. The Massachusetts Earned Income Credit, a state tax credit program, is available to Massachusetts workers who are eligible for the federal EIC.

Child Tax Credit

The Child Tax Credit (CTC) is a federal tax credit for low and moderate income families with dependent children under age 17. The purpose of the Child Tax Credit is to lower the tax burden of families who are raising children. The maximum CTC is $1000 per qualifying child.

Housing Tax Credits 2008-2009-2010

The 2008, 2009, and 2010 housing tax credits offer tax incentives to help revitalize the housing market, including a first-time homebuyer tax credit, a repeat homebuyer tax credit, and a property tax deduction for homeowners who do not itemize deductions.

Education Tax Credits

Education tax credits and deductions are federal tax benefits that help offset the costs of college tuition, fees, and other education related expenses. Education tax credits and deductions include:

• American Opportunity / Hope Credit: a partially refundable federal tax credit up to $2500 per student per year for college tuition, fees, books, and supplies, that can be claimed the first four years of post-secondary education
• Lifetime Learning Credit: a nonrefundable federal tax credit for qualified education expenses, equal to 20% of the first $10,000 that you paid for all family members, up to a maximum of $2000 per year per family
• Tuition and Fees Deduction: a federal income tax deduction for qualified tuition and fees, up to a maximum deduction of $4000, that reduces the amount of income that is taxable
• Student Loan Interest Deduction: a federal income tax deduction for interest you paid during the year for a qualified student loan for yourself, your spouse, or a dependent, that reduces your taxable income
• Business Deduction for Work-Related Education: a federal income tax deduction for employees and self-employed workers who paid qualifying education expenses during the year, that lowers the amount of income subject to tax

Circuit Breaker Tax Credit

The Circuit Breaker Tax Credit is a state income tax credit for certain Massachusetts residents age 65 or older who paid rent or real estate taxes during the tax year.

Real Estate Tax Exemptions

Real estate tax exemptions are deductions from the amount of property taxes homeowners must pay to the city or town where they live. Real estate tax exemptions are given to the elderly, the blind, veterans, and other eligible homeowners to help them pay their property tax bills. Seniors can earn abatements through the Senior Property Tax Work-Off Program.

Lead Paint Removal Credit

The Lead Paint Removal Credit is a state income tax credit for Massachusetts residential property owners who cover or remove lead paint hazards on their property. The maximum tax credit is $1500 per residential unit for full deleading, or $500 per residential unit for interim control measures.

Child and Dependent Care Credit

The Child and Dependent Care Credit is a federal tax credit that helps working parents or caregivers pay for child care or other dependent care. The credit is nonrefundable, meaning that the credit amount is limited to the amount of taxes you owe.