BOSTON (AP) — Massachusetts lawmakers unveiled a tax relief package Tuesday aimed at providing $561 million in tax relief to taxpayers and businesses in the current fiscal year through a series of tax credits and other steps to reduce the tax burden.
The proposal — which, if fully implemented, would provide more than $1 billion in tax relief by fiscal year 2027 — includes more than a dozen specific tax proposals, from eliminating the tax on estates under $2 million to increasing the tax credit for children and dependents from $180 to $330 per child or dependent in the current tax year to $440 for the 2024 tax year.
Lawmakers say the increased child tax credit will benefit 565,000 families and will be the most generous universal child and dependent tax credit in the country.
The bill would also increase the rental deduction cap from $3,000 to $4,000, reduce the short-term capital gains tax rate from 12% to 8.5%, and allow cities and towns to establish a local property tax exemption, to promote affordable housing.
Democratically Senate President Karen Spilka called the proposal historic.
“It’s the largest bipartisan tax relief proposal in over a generation,” Spilka said. “This tax relief bill will help alleviate many, many financial burdens that our families, our seniors and our renters face and put real money in their pockets.”
For a low-income household with two children, the tax refund check will increase by more than $1,000 if the bill takes effect, she said.
“This is real money,” she added.
House Speaker Ronald Mariano, a fellow Democrat, also praised the bill, particularly the provision that increases the maximum circuit breaker tax credit from $1,200 to $2,400 for seniors renting or renting as their primary residence.
“It’s one of the greatest programs we’ve ever come up with in my time in the state, where you actually get money to live in your home even if you don’t pay state taxes,” Mariano said.
The bill is expected to be voted on in the House of Representatives on Wednesday and in the Senate on Thursday.
If approved, the next stop will be Gov. Maura Healey’s office for her signature.
Healey called tax relief essential to making Massachusetts “more affordable, competitive and fair.”
“This is a comprehensive package that provides relief to families and businesses, including through our proposed child and family tax credit,” Healey said in a written statement. “I look forward to reviewing the details.”
Healey released her own $742 million tax relief package in February. Their proposal would have eliminated the tax on estates worth up to $3 million. Massachusetts is one of only 12 states with an estate tax.
In April, Massachusetts House members overwhelmingly approved their own $654 million tax relief package, followed by the Senate unveiling a $590 million tax relief proposal in June.
The only compromise bill scheduled to be voted on this week would also make changes to a 1986 law that was intended to limit the growth of states’ tax revenues and return any surpluses to taxpayers. The law triggered nearly $3 billion in refunds last year.
The bill would keep the law in place but ensure the money is distributed equally to taxpayers, lawmakers said.