As of October 4, 2023, the Massachusetts estate tax filing exemption retroactively increased from $1 million to $2 million for decedents dying on or after January 1, 2023.1 This is the first increase in the Massachusetts estate tax exemption since 2006.
As an example of this change, the estate of a resident who died on December 31, 2022 with a $2 million Massachusetts taxable estate, owed a Massachusetts estate tax of $99,600. The estate of a resident who died on January 1, 2023, with a $2 million Massachusetts taxable estate does not owe any Massachusetts estate tax.
If an estate tax return for an individual who died this year has already been filed, a refund request may be filed based on the new $2 million exemption.
Estates exceeding $2 million will be subject to tax on the excess at a rate starting at 7.2 percent and increasing with the size of the estate, up to 16 percent.1
The Massachusetts estate tax owed by the estates of residents who owned real or tangible personal property outside of Massachusetts will be reduced by the proportion of his or her overall estate made up of these out-of-state assets.
Notably, the Massachusetts exemption is not indexed for inflation and is not portable between spouses. For a married couple, trust planning is still required to maximize the use of the exemption for each spouse. Please consult your qualified tax or estate planning professional for guidance.
For more details on this new legislation, please see Massachusetts new estate tax changes FAQ's.
For more information on Massachusetts estate taxes, please see Massachusetts Department of Revenue's Guide to Estate Taxes
Rules For Home Office Deductions
If you have a business and work out of your home, the IRS allows you to deduct certain expenses on your return. Here are a few key things to keep in mind:
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov
Beware Of Imposter Scams
Scammers often pose as businesses or people you know — like your bank, utility company, phone provider or even a friend or relative. They may ask you to send funds to yourself or others using online or mobile banking. They may spoof legitimate phone numbers to call or text you to make the request more convincing.
How to help protect yourself:
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NOVEMBER 2023: MA State Tax Exemption Changes
November 07, 2023