Federal and State Income Taxes

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Massachusetts Senior Circuit Breaker Tax Credit

If you are age 65 or older, you may be eligible to claim a refundable credit on your personal state income tax return. The Senior Circuit Breaker tax credit is based on the actual real estate taxes paid on the Massachusetts residential property you own or rent and occupy as your principal residence.

The maximum credit amount for tax year 2024 is $2,730. If the credit you're owed exceeds the amount of the total tax payable for the year, you'll be refunded the additional amount of the credit without interest.

Who is eligible

• You must be a Massachusetts resident or part-year resident.
• You must be 65 or older by December 31 of the tax year.
• You must file a Schedule CB with your Massachusetts personal income tax return. 
• You must own or rent residential property in Massachusetts and occupy it as your primary residence.
• For tax year 2024, your total Massachusetts income doesn't exceed:
  • $72,000 for a single individual who is not the head of a household.
  • $91,000 for a head of household.
  • $109,000 for married couples filing a joint return.
• If you are a homeowner, your Massachusetts property tax payments, together with half of your water and sewer expense, must exceed 10% of your total Massachusetts income for the tax year.
• If you are a renter, 25% of your annual Massachusetts rent must exceed 10% of your total Massachusetts income for the tax year.
• The assessed valuation of the homeowner's personal residence as of January 1, 2024, before residential exemptions but after abatements, cannot exceed $1,172,000.
• The Schedule CB must be completed within 3 years from the last day for filing the return, without regard to any extension of time to file. 

• You are a nonresident. 
• You are married and your status is married filing separately.
• You are a dependent of another taxpayer.
• You receive a federal and/or state rent subsidy or you rent from a tax-exempt entity.
• For tax year 2024, the assessed value of principal residence exceeds $1,172,000.
• If you did not complete a Schedule CB within 3 years from the last day for filing the return, without regard to any extension of time to file.

2024 Income Tax Tips For Massachusetts Seniors

Note: The staff of  Massseniors.org are not income tax professionals. The Tax Tips listed below are taken from the Massachusetts Department of Revenue website and reproduced as a convenience for our readers. Before you file your tax returns always consult a Tax Professional.

January 16, 2025

In Massachusetts you  may qualify for No Tax Status   and a Limited Income Credit.  Check here to see if you qualify:

https://www.mass.gov/info-details/massachusetts-no-tax-status-and-limited-income-credit#:~:text=If%20your%20Massachusetts%20AGI%20doesn%27t%20exceed%20certain%20amounts,Massachusetts%20AGI%20Worksheet%20in%20the%20Form%201%20instructions. 

You're allowed a $700 exemption if you're age 65 or older before the end of the year. If filing a joint return, each spouse may be entitled to 1 exemption if each is age 65 or over on December 31 (not January 1 as per federal rule) of the tax year.

To report the exemption on your tax return:

1. Fill in the appropriate oval(s) and enter the total number of people who are age 65 or over in the box.
2. Multiply the total by $700 and enter the result on either Form 1 (Line 2c) or Form 1-NR/PY (Line 4c).

You're allowed a $2,200 exemption if you or your spouse is legally blind at the end of the taxable year.

You're legally blind for Massachusetts purposes if your visual acuity with correction is 20/200 or less in the better eye, or if your peripheral field of vision has been reduced to a 10-degree radius or less.

You're not legally required to attach a doctor's statement verifying legal blindness to your return, but you should be prepared to submit such a statement upon request.

To report the exemption on your tax return:

1. Fill in the appropriate oval(s) on either Form 1 (Line 2d) or Form 1-NR/PY (Line 4d).
2. Enter the total number of blindness exemptions in the small box.
3. Multiply the number of exemptions by $2,200 and enter the result on either Form 1 (Line 2d) or Form 1-NR/PY (Line 4d).

Medical and Dental Exemptions

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You're allowed an exemption for medical, dental and other expenses paid during the taxable year. You must itemize deductions on your Form 1040 - U.S. Individual Income Tax Returns or Form 1040-SR - U.S. Tax Return for Seniors. 

If you itemize on U.S. Schedule A (Line 4) and have medical/dental expenses greater than 10% of federal AGI, you may claim a medical and dental exemption in Massachusetts equal to the amount you reported on U.S. Schedule A, line 4. If either you or your spouse was born before January 2, 1950, it has to be greater than 7.5% of federal AGI.

Married taxpayers:

• Married filing joint for federal - File joint in Massachusetts to claim this exemption. Generally, you may include medical expenses paid for yourself, spouses, and dependents claimed on your return.
• Married filing separate for federal - File married filing joint for Massachusetts. If you file separate federal returns but a joint Massachusetts return, complete a pro-forma joint U.S. Schedule A to calculate the proper Massachusetts medical expense exemption. To be allowed the exemption, total itemized deductions must be greater than the standard deduction.
• Married filing separate for both federal and Massachusetts - Each spouse may file their own Schedule A.

Massachusetts does not adopt the federal health insurance credit.

You can also include, in medical expenses, part of monthly or lump-sum life-care fees or "founder's fees" you paid to a retirement home under the agreement.

The part of the payment you can include is the cost of medical care. The agreement must have you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. However, you can't deduct the part of the founder's fee used to construct the health facilities.

If the person living in the retirement home chooses to terminate residence, you can include, in gross income, any refund of the founder's fee related to previously allowed deductions.

To report the exemption on your tax return:

1. Enter the amount reported on U.S. Schedule A (Line 4) on either Form 1 (Line 2e) or Form 1-NR/PY (Line 4e). Add this amount to the adoption exemption, if any.
2. Enter the totals of adoption and medical on either Form 1 (Line 2g), or Form 1-NR/PY (Line 4g).
3. Itemize deductions on U.S. Form 1040, U.S. Form 1040-SR and Schedule A.

If you're submitting an abatement/amended tax return, attach:

• A copy of U.S. Schedule A

Income from most private pensions or annuity plans is taxable in Massachusetts but many government pensions are exempt.  Withdrawals from a traditional IRA are taxable but the Massachusetts taxable amount may be different from the federal taxable amount.

Learn more about the rules for the types of pension or retirement income plans which you receive:

• Government pensions and retirement plans
• Other states' tax treatment of out-of-state government pension
• Non-government pensions and retirement plans

Massachusetts gross income doesn’t include Social Security benefits. Under I.R.C. § 86, these benefits may be included in federal gross income depending on income thresholds. 

If you earn wages or are self-employed, learn more about the Social Security (FICA) and Medicare Deduction.

● If you are age 65 or over before January 1, 2024, you are entitled to a $700 exemption. This $700 exemption is also available for your spouse if he or she is 65 or over before January 1, 2024. This exemption is in addition to your personal exemption of $4,400 if single, $6,800 if head of household and $8,800 if married filing a joint return.

● Benefits paid under a life insurance contract for terminally or chronically ill insured individuals are excluded from Massachusetts gross income if they are excluded from federal gross income.

● Massachusetts has adopted the federal $250,000 ($500,000 for joint filers) exclusion of gain from the sale of a principal residence after December 31, 1997. The following is an example: Your principal home in Boston was purchased in 1990 for $400,000. In 2023, the home is sold for $600,000, resulting in a gain of $200,000. The gain is not subject to tax.

● You're allowed a $2,200 exemption if you or your spouse is legally blind at the end of the taxable year. You're legally blind for Massachusetts purposes if your visual acuity with correction is 20/200 or less in the better eye, or if your peripheral field of vision has been reduced to a 10-degree radius or less. You're not legally required to attach a doctor's statement verifying legal blindness to your return, but you should be prepared to submit such a statement upon request.

●You're allowed an exemption for medical, dental and other expenses paid during the taxable year. You must itemize deductions on your Form 1040 - U.S. Individual Income Tax Returns or Form 1040-SR - U.S. Tax Return for Seniors. 

If you itemize on U.S. Schedule A (Line 4) and have medical/dental expenses greater than 10% of federal AGI, you may claim a medical and dental exemption in Massachusetts equal to the amount you reported on U.S. Schedule A, line 4. If either you or your spouse was born before  

● Income from most private pensions or annuity plans is taxable in Massachusetts but many government pensions are exempt.  Withdrawals from a traditional IRA are taxable but the Massachusetts taxable amount may be different from the federal taxable amount.

Federal Income Tax Tips for Seniors

Source:   IRS   https://www.irs.gov/individuals/seniors-retirees/tips-for-seniors-in-preparing-their-taxes

 Standard deduction for seniors – If you do not itemize your deductions, you can get a higher standard deduction amount if you and/or your spouse are 65 years old or older. You can get an even higher standard deduction amount if either you or your spouse is blind. (See Form 1040 and Form 1040-SR instructions PDF.) 

 Taxable Amount of Social Security benefits – When preparing your return, be especially careful when you calculate the taxable amount of your Social Security. Use the Social Security benefits worksheet found in the Form 1040 and Form 1040-SR instructions PDF, and then double-check it before you fill out your tax return. See Publication 915, Social Security and Equivalent Railroad Retirement Benefits PDF. 

Credit for the Elderly or Disabled – You must file using Form 1040 or Form 1040-SR to receive the Credit for the Elderly or Disabled. Be sure to apply for the Credit if you qualify; please read below for details.

Who can take the credit – The credit is based on your age, filing status and income. You may be able to take the Credit if:

• Age: You and/or your spouse are either 65 years or older; or under age 65 years old and are permanently and totally disabled.

AND

• Filing status: Your income on Form 1040 line 38 is less than $17,500, $20,000 (married filing jointly and only one spouse qualifies), $25,000 (married filing jointly and both qualify), or $12,500 (married filing separately and lived apart from your spouse for the entire year).

And, the non-taxable part of your Social Security or other nontaxable pensions, annuities or disability income is less than $5,000 (single, head of household, or qualifying widow/er with dependent child); $5,000 (married filing jointly and only one spouse qualifies); $7,500 (married filing jointly and both qualify); or $3,750 (married filing separately and lived apart from your spouse the entire year).

Calculating the credit – Use Schedule R (Form 1040 or 1040-SR), Credit for the Elderly or Disabled PDF, to figure the amount of the credit. See the instructions for Schedule R (Forms 1040 or 1040-SR) PDF if you want the IRS to figure this credit for you.

Also see Publication 524, Credit for the Elderly or Disabled PDF or Publication 554, Tax Guide for Seniors PDF.