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Massachusetts Form 1 - Massachusetts Resident Income Tax Return Instructions
Before You Begin
At the time this booklet was printed, the IRS had not released final versions of its forms and schedules. Therefore, taxpayers should double-check references to U.S. forms and schedules within this booklet before filing their returns.
Form 1 Checklist
- If you received a booklet in the mail, be sure to retain the four-digit Personal Identification Number (PIN) printed on the back cover. You may need it to use DOR’s Web-based and/or Interactive Voice Response (IVR) applications, such as checking the status of your refund.
- Have you entered your Social Security number( s) on Form 1?
- Have you completed and enclosed all three pages of Form 1 and applicable schedules?
- Have you completed and enclosed Schedule HC, Health Care Information?
- If you changed your name, did you enclose a copy of your Social Security card or driver’s license showing your new name and fill in the name/address change bubble on Form 1?
- Have you, and your spouse if married filing jointly, signed your return at the bottom of page 1 of Form 1?
- Have you marked an “X” in any form or schedule box that shows a loss?
- Have you completed Schedule DI, Dependent Information, if claiming a dependent exemption on Form 1, line 2b or taking a deduction/credit(s) on Form 1, lines 12, 13 or 40 (if applicable)?
- If making a payment, have you enclosed your check and Form PV with your return? Be sure to put your Social Security number on your check. Form PV is attached to the back of the envelope found in this booklet. Also, be sure to use the light blue mailing label when mailing your Form 1 with the Form PV.
Major 2009 Tax Changes
Duty to Obtain Health Insurance; Penalty for Failure to Obtain Health Insurance
Most Massachusetts residents age 18 and over are required to have health insurance, if it is affordable to them. Residents who have access to affordable coverage but do not obtain the coverage may face state tax penalties pursuant to G.L.c. 111M, sec. 2. Starting with 2008, adults who can afford health insurance are required to have coverage each month of the year, although 63day gaps in coverage are allowed. The monthly penalties for failing to obtain affordable coverage for taxable year 2009 are set out in TIR 09-1 and are based on half of the minimum monthly insurance premium for which an individual would have qualified through the Connector.
Pursuant to its authority under the Act, the Connector issued Administrative Information Bulletin 02-08 that temporarily extends the permitted, penalty-free gap in health insurance coverage to three months (as opposed to the statutory 63-day gap). For 2009, adults who lose but then resume their coverage within three or fewer consecutive calendar months will not be subject to tax penalties. [Patrick - check with Melissa.]
Schedule HC, Health Care Information, must be completed by all full-year residents and certain part-year residents age 18 and over to notify the Department whether or not they had health insurance in each month of 2009. Taxpayers who did not have coverage for all of 2009, or had a gap in coverage of four or more consecutive months will need to determine if they had access to affordable health insurance (either through an employer, the government or on their own). The instructions to Schedule HC contain the worksheets and tables to determine whether the taxpayer had access to affordable health insurance. If it is determined that a taxpayer could have afforded health insurance, the taxpayer has the right to appeal the application of the penalty due to hardship by requesting an appeal to the Connector on the Schedule HC.
For more information about the health care reform law, including DOR’s regulation at 830 CMR 111M.2.1, Health Insurance Individual Mandate; Personal Income Tax Return Requirements, or the Connector’s regulation at 956 CMR 6.00, Determining Affordability for the Individual Mandate, see the Connector’s website at www.mahealthconnector. org or DOR’s website at www.mass.gov/dor.
Circuit Breaker Tax Credit Increased
A credit is allowed to an owner or tenant of residential property located in Massachusetts equal to the amount by which the real estate tax payment or 25% of the rent constituting real estate tax payment exceeds 10% of the taxpayer’s total income, not to exceed $960. The amount of the credit is subject to limitations based on the taxpayer’s total income and the assessed value of the real estate, which must not exceed $788,000. For tax year 2009, an eligible taxpayer’s total income cannot exceed $51,000 in the case of a single filer who is not a head of household filer, $64,000 for a head of household filer, and $77,000 for joint filers. In order to qualify for the credit, a taxpayer must be age 65 or older and must occupy the property as his or her principal residence. See TIR 09-16 for more information.
Dairy Farmer Tax Credit
The Massachusetts dairy farmer tax credit was established to offset the cyclical downturns in milk prices paid to dairy farmers and is based on the U.S. Federal Milk Marketing Order for the applicable market. A taxpayer who holds a certificate of registration as a dairy farmer pursuant to G.L. c. 94, s. 16A is allowed a refundable tax credit based on the amount of milk produced and sold. The dairy farmer tax credit as originally enacted was 90% refundable. Under recent legislation, the dairy farmer tax credit is now 100% refundable.
Military Spouses Residency Relief Act
On November 11, 2009, the Military Spouses Residency Relief Act (P.L. 111-97) was enacted. The Act prohibits a servicemember’s spouse from either losing or acquiring a residence or domicile for purposes of taxation because of being absent or present in any U.S. tax jurisdiction solely to be with the servicemember in compliance with the servicemember’s military orders if the residence or domicile is the same for the servicemember and the spouse. For more information, see TIR 09-23.
New Current Code Provisions
As a general rule, Massachusetts will not adopt any federal tax law changes incorporated into the Internal Revenue Code (“Code”) after January 1, 2005. However, certain specific provisions of the personal income tax automatically adopt the current Code. Provisions of the Code adopted on a current Code basis are (i) Roth IRAs, (ii) IRAs, (iii) the exclusion for gain on the sale of a principal residence, (iv) trade or business expenses, (v) travel expenses, (vi) meals and entertainment expenses, (vii) the maximum deferral amount of government employees’ deferred compensation plans, (viii) deduction for health insurance costs of self employed, (ix) medical and dental expenses, (x) annuities, and (xi) health savings accounts. See TIRs 98-8, 02-11, and 07-4 for further details on Massachusetts’ personal income tax current Code provisions.
New Exclusion Allowed
Temporary Subsidy for COBRA Coverage of Unemployed Workers - The federal American Recovery and Reinvestment Act of 2009 (P.L. 111-5 or “ARRA”) allows a COBRA subsidy for certain involuntarily-terminated employees and their families. Recently, the Legislature adopted the current Code with regard to the federal exclusion from gross income of the COBRA subsidy under IRC sec. 139C. Thus, Massachusetts adopts the new federal exclusion from gross income for the COBRA subsidy. See TIR 09-21 for more information.
Temporary Increase in Earned Income Credit - For federal income tax purposes, the ARRA amends IRC sec. 32 to increase the earned income tax credit percentage for families with three or more qualifying children to 45% for 2009 and 2010. The ARRA also increases the threshold phase-out amounts for married couples filing joint returns to $5,000 above the threshold phase-out amounts for singles, surviving 5 spouses, and heads of household for 2009 and 2010. The Massachusetts earned income tax credit equals 15 % of the federal earned income tax credit received by the taxpayer for the taxable year. Therefore, Massachusetts allows 15% of whatever the taxpayer receives federally under IRC sec. 32. The effect is that Massachusetts will allow a larger credit for 2009 and 2010 due to the ARRA and its increases to the federal earned income tax credit for those years. [Patrick – this has to be different in the nonresident instructions.]
Temporary Increase in Section 179 Expensing - Effective for the tax years beginning in 2009, for federal income tax purposes, the ARRA increased the IRC sec. 179 election to expense property in its initial year from $133,000 to $250,000. The federal Act also increased the sec. 179 overall investment limit from $530,000 to $800,000. Massachusetts adopts the increases in this expensing provision given sec. 179 is a trade or business expense deduction adopted by Massachusetts on a current Code basis.
Tax-Free Distributions from Individual Retirement Accounts
Qualified Charitable Distribution from an Individual Retirement Account (“IRA”) IRC sec. 408(d)(8) - The Pension Protection Act of 2006 (P.L. 109280) allowed taxpayers age 701/2 or greater to make tax-free distributions from traditional and Roth IRAs to qualified charities for the 2006 and 2007 tax years, not to exceed $100,000 per tax year. The exclusion was extended for distributions made in tax years 2008 and 2009 by the Emergency Economic Stabilization Act of 2008 (P.L. 110-343). Massachusetts adopts this exclusion from gross income, including the extension for tax years 2008 and 2009, given this federal Code provision for IRAs is adopted by Massachusetts on a current Code basis. See TIR 06-20 and Schedule X, line 2 for further details.
New Exclusion - Not Allowed
Partial Exclusion of Unemployment Compensation - For federal income tax purposes, pursuant to IRC sec. 85(c), individuals must include in gross income any unemployment compensation received under the laws of the U.S. or any state. Under the ARRA, up to $2,400 of unemployment compensation benefits received in 2009 are excluded from federal gross income by the recipient. Massachusetts follows the provisions of IRC sec. 85(c) as amended and in effect on January 1, 2005. Massachusetts does not adopt the partial exclusion of unemployment compensation because it was enacted after January 1, 2005.
New Deduction - Not Allowed
Federal “Bonus” Depreciation - For federal income tax purposes, the ARRA provides for an additional depreciation deduction, under IRC sec. 168(k), in the placed-in-service year equal to 50% of the adjusted basis of “qualified property.” The property must be acquired after December 31, 2008 and before January 1, 2010. Under 2002 legislation, Massachusetts de- coupled from bonus depreciation allowed under IRC sec. 168(k), as amended and in effect for the current year. Therefore, Massachusetts does not adopt this additional depreciation deduction. See TIRs 02-11 and 03-25 for further details.
New Deduction - Not Allowed
Deduction for State or Local Sales Tax Paid on the Purchase of a Qualified Motor Vehicle - Under the ARRA, for federal income tax purposes, an individual can deduct the state or local sales and excise taxes paid on the purchase of a qualified motor vehicle, subject to certain limitations and adjusted gross income phase out. For federal purposes, the deduction can either increase the amount of a taxpayer’s standard deduction or be taken as an itemized deduction. Massachusetts does not adopt the federal standard deduction or federal itemized deductions. Thus, Massachusetts does not adopt this deduction for sales tax paid on a qualified motor vehicle.
Massachusetts Decouples from Certain Business Tax Provisions
Recent legislation includes provisions decoupling Massachusetts tax law from certain federal business tax law changes made by ARRA and, in one instance, from the impact of an IRS Notice that was effectively repealed (but only prospectively) by ARRA. The specific federal provisions from which the Massachusetts legislation decouples include: (a) deferral of the recognition of certain cancellation of indebtedness income under the Code, (b) suspension of Code rules that would otherwise disallow or defer deductions for original issue discount claimed by issuers of debt obligations, and (c) relief from certain limitations on the use of losses after a change of ownership under (i) IRS Notice 2008-83 (for periods prior to its effective repeal by ARRA) and (ii) new IRC sec 382(n) as added by ARRA. For more information, see TIR 09-21.
Exclusion - Not Allowed
Mortgage Forgiveness - IRC sec. 108(a) - The Mortgage Forgiveness Debt Relief Act of 2007 (P.L. 110-142) amended IRC section 108(a) by adding an exclusion for indebtedness that is discharged before January 1, 2010 and is qualified principal residence indebtedness. The Economic Stabilization Act of 2008 extended this exclusion for three years, until January 1, 2013. Massachusetts does not adopt this exclusion or the extension because they were enacted after January 1, 2005.
Extended Deductions - Not Allowed
Massachusetts allows certain federal deductions based on the Internal Revenue Code as amended and in effect on January 1, 2005. Under the January 1, 2005 Code, certain federal deductions due to expire, have now been extended. Massachusetts will not adopt the extensions because they were enacted after January 1, 2005.
Tuition and Fees Deduction - IRC secs. 62(a)(18) and 222 - The Emergency Economic Stabilization Act of 2008 extended the federal deduction for qualified higher education expenses to tax years 2008 and 2009. Massachusetts will not adopt this extension because it was enacted after January 1, 2005. However, there is a separate Massachusetts deduction for undergraduate tuition if the total paid exceeds 25% of the taxpayer’s Massachusetts adjusted gross income. See TIR 97-13 for additional information.
Educators Deduction - IRC sec. 62(a)(2)(D) - The Emergency Economic Stabilization Act of 2008 extended the federal deduction for certain expenses paid by educators to tax years 2008 and 2009. Massachusetts will not adopt this extension because it was enacted after January 1, 2005.
Criminally Fraudulent Investment Arrangements - In 2009, the IRS issued Revenue Procedure 2009-20 providing an optional safe harbor method for qualified investors to deduct theft losses under IRC sec. 165(c) from investments in criminally fraudulent Ponzi-type schemes. Also, in 2009, the IRS issued Revenue Ruling 2009-9 to describe the proper federal income tax treatment for losses resulting from these Ponzi schemes. In the case of individual investors, Massachusetts law does not adopt the federal safe harbor treatment for qualified investors with theft losses from a Ponzi scheme that is outlined in Revenue Procedure 2009-20. In a further departure from federal law, Massachusetts does not adopt a net operating loss in the case of the personal income tax.
The Massachusetts tax relief potentially available to qualifying individual taxpayers who invested in a criminally fraudulent investment arrangement is explained in TIR 09-15.
Parking, Combined Commuter Highway Vehicle Transportation and T- Pass Fringe Benefit - IRC sec. 132(f) - The federal exclusion amounts for tax year 2009 are $230 per month for qualified parking, and $120 per month for combined commuter highway vehicle transportation and transit passes for the months of January and February. For federal income tax purposes, ARRA increased the exclusion amount to $230 per month for combined commuter highway vehicle transportation and transit passes for the months of March through December. Massachusetts follows the inflation adjustment formula allowed under the January 1, 2005 Code and does not adopt the increased exclusion allowed by ARRA for combined commuter highway vehicle transportation and transit passes. The Massachusetts exclusion amounts for tax year 2009 are $230 per month for qualified parking, and $120 per month for combined commuter highway vehicle transportation and transit passes. These differences will be reflected in the Form W-2 provided by your employer.
Privacy Act Notice
Under the authority of 42 U.S.C. sec. 405(c)(2) (C)(i), and M.G.L. c. 62C, sec. 5, the Department of Revenue has the right to require an individual to furnish his or her Social Security number on a state tax return. This information is mandatory. The Department of Revenue uses Social Security numbers for taxpayer identification to assist in processing and keeping track of returns and in determining and collecting the proper amount of tax due. Under M.G.L. c. 62C, sec. 40, the taxpayer’s identifying number is required to process a refund of overpaid taxes. Although tax return information is generally confidential pursuant to M.G.L. c. 62C, sec. 21, the Department of Revenue may disclose return information to other taxing authorities and those entities specified in M.G.L. c. 62C, secs. 21, 22 or 23, and as otherwise authorized by law.
Common Form 1 Mistakes
An incomplete or incorrect return can delay the processing of your return. Listed below are a number of tips to help us process your return as quickly as possible.
Note: You should not staple any items, other than any required Form(s) W-2 or 1099, to Form 1. Any enclosures such as schedules, statements, Form PV, etc. should simply be placed in the envelope along with Form 1 when mailing.
- Missing Social Security number(s). Be sure to enter your Social Security number(s) in the spaces provided on all pages and schedules.
- Missing Schedule HC. Be sure you have completed and enclosed Schedule HC, Health Care Information. We cannot process your return without this schedule.
- Incorrect computation. The Department corrects many returns each year due to errors in computation. Before mailing your return, check your arithmetic to make sure the computations are correct.
- Filing status. Be sure to fill in the correct oval in line 1, Filing Status. This line is frequently overlooked.
- Exemptions. Be sure that you specify the number of exemptions you are claiming in line 2, items b, c and d. Enter the appropriate number(s) in the small white box(es). Note: You must complete Schedule DI, Dependent Information, if claiming a dependent exemption in line 2b.
- Missing pages of Form 1. Form 1 is three pages. Be sure to include all three pages of the return when mailing.
- Missing withholding statement(s). Be sure the state copy of Form(s) W-2 (Wages), W-2G (Winnings), PWH-WA (Promoter Withholding), 2G, K-1, 2K-1, 3K-1 and SK-1 and any Form 1099 that show Massachusetts income tax withheld are attached with a single staple. These forms are frequently missing and must be obtained later from you in order to process the return.
- Missing supporting schedules. Be sure all required schedules are enclosed to support the information on your Form 1. These include Massachusetts Schedules HC, X, Y, Z, B, C, C-2, D, DI, E, E-1, E-2, E-3, and CB. We cannot process your return without these forms.
- Government employee pension contributions. If you were a state, local or county employee and made contributions to a Massachusetts state or local pension plan, your total wages for state purposes will be different from the amount you report on your U.S. return. Report your total state wages from your Form(s) W-2 on Form 1. This is generally box 16 of Form W-2.
- Earned Income Credit. You must have your federal earned income credit amount from your U.S. return or as computed by the IRS if you wish to claim the Earned Income Credit on Form 1. Also, you must complete Schedule DI, Dependent Information, if you have one or more qualifying children/dependents for the Earned Income Credit.
- Missing signatures. Thousands of unsigned returns are received by the Department every year. These returns must be returned to the taxpayers for signatures. If a joint return is filed, both spouses must sign the return. Make sure signatures are on the correct lines. Remember to sign your return at the bottom of page 1 of Form 1.
- Missing Form PV. If you are making a payment, make certain you fill out Form PV, Massachusetts Income Tax Payment Voucher. Form PV is attached to the back of the envelope found in this booklet. Enclose Form PV and your check with your return. Be sure to use the light blue mailing label when mailing your Form 1 with the Form PV. Note: Go to www.mass.gov/dor and click on Web Services for Income for online payment options.
Filing Your Massachusetts Return
If you were a legal resident of Massachusetts and your gross income was more than $8,000 - whether received from sources inside or outside of Massachusetts - you are required to file a Massachusetts income tax return. If your gross income was $8,000 or less, you do not need to file a return.
If you did not live in Massachusetts but received Massachusetts source income in excess of your personal exemption amount multiplied by the ratio of your Massachusetts income to your total income, you must file as a nonresident on the Non- resident/Part-Year Resident Income Tax Return, Form 1-NR/PY. Generally, this means you must file Form 1-NR/PY if you were a nonresident of Massachusetts and you received Massachusetts source income in excess of $4,400 if single or married filing separately, $6,800 if head of household or $8,800 if married filing jointly.
If, during the taxable year, you either moved to Massachusetts or terminated your status as a Massachusetts resident to establish residency outside the state, and your gross income was more than $8,000 - whether received from sources inside or outside of Massachusetts - you must file as a part-year resident on the Nonresident/Part- Year Resident Income Tax Return, Form 1-NR/PY.
What Is Gross Income?
Massachusetts gross income includes the following:
- all wages, salaries, tips, bonuses, fees and other compensation;
- taxable pensions and annuities;
- pension income from another state or political subdivision before any deduction;
- taxable IRA/Keogh and Roth IRA distributions; . alimony;
- income from a business, trade, profession, partnership, S corporation, trust or estate;
- rental, royalty and REMIC income;
- unemployment compensation;
- taxable interest and dividends;
- gambling winnings;
- capital gains;
- forgiveness of debt;
- mortgage forgiveness;
- taxable portion of scholarships and fellowships; and
- any other income not specifically exempt.
Massachusetts gross income also includes the following which are not subject to U.S. income tax:
- interest from obligations of states and their political subdivisions, other than Massachusetts and its political subdivisions; and
- income earned by a resident from foreign employment.
Massachusetts gross income does not include:
- interest on obligations of the U.S. and U.S. territories;
- amounts received as U.S. Social Security, public welfare assistance, Veterans Administration disability payments, G.I. Bill education payments, certain worker’s compensation, gifts, accident or life insurance payments, or certain payments received by Holocaust survivors; and
- compensation earned by members of the armed forces for service in a combat zone (excluded to the same extent as under federal law).
Am I a Resident, Nonresident, or Part-Year Resident?
There are three different categories of resident status under Massachusetts tax law:
- You are a Full-Year Resident if your legal residence (domicile) is in Massachusetts or if you maintain a permanent place of abode in Massachusetts and during the year spend more than 183 days, in the aggregate, in the state. If you fit this description you should file a Massachusetts Resident Income Tax Return, Form 1.
- You are a Nonresident if you were not a resident of Massachusetts but earned Massachusetts income (e.g., from a job in Massachusetts). You must report such income by filing a Massachusetts Nonresident/Part-Year Resident Income Tax Return, Form 1-NR/PY.
- You are a Part-Year Resident if you either moved into or moved out of Massachusetts during the taxable year. In this case, you must reduce certain income, deductions and exemptions based on the number of days you were a resident or on the amount of your income that is subject to Massachusetts tax. Part-year residents must file a Massachusetts Nonresident/Part-Year Resident Income Tax Return, Form 1-NR/PY.
If both categories 2 and 3 apply to you, you will have to file both as a nonresident and as a part- year resident. In these cases, you must file one Massachusetts Form 1-NR/PY and complete the Resident/Nonresident Worksheet, Schedule R/NR, to calculate the portion of income earned while a part-year resident and the portion of income earned while a nonresident. If you are required to file as both a part-year resident and a nonresident, be sure to fill in the oval below the address section of Form 1-NR/PY to indicate that you are completing Schedule R/NR and enclose Schedule R/NR with your return.
See TIR 95-7 for more information regarding resident status. For information on how to file as a part-year resident/nonresident, visit DOR’s website at www.mass.gov/dor or call (617) 887-MDOR or toll-free in Massachusetts 1-800-392-6089.
Are Military Personnel Required to File?
If you enlisted in the service as a Massachusetts resident and have not established a new domicile (legal residence) elsewhere (refer to military guidelines), and if your gross income is more than $8,000, you are required to file a Massachusetts resident income tax return. This applies even though you may be stationed outside of Massachusetts. The terms “legal residence” and “domicile” are used to denote that place where you have your permanent home and to which, whenever you are absent, you have the intention of returning. Nonresident military personnel stationed in Massachusetts may be subject to Massachusetts taxes and should file Form 1-NR/PY if they earn income from outside military sources.
The following example illustrates circumstances under which military pay is or is not taxable in Massachusetts. No guidance is intended on the tax treatment of such pay under the laws of other states. Generally, when income is taxable in two jurisdictions, a credit for taxes paid to the other jurisdiction is allowed on the taxpayer’s return in the state of his/her residence.
Example: Betsy enlisted in the Navy in Massachusetts, but moved with her husband, Eric, from Massachusetts to Delaware when she was stationed there. They did not change their domicile to Delaware. She received military income while her husband received income working as a reporter for a local newspaper.
Betsy’s income from the Navy, as well as her husband’s income from the newspaper, are both subject to Massachusetts income tax since she enlisted in the Navy in Massachusetts and they did not become legal residents of Delaware. Betsy and her husband are, therefore, Massachusetts residents, and any income they receive, whether derived in Massachusetts or not, is included in their Massachusetts gross income.
What Are the Rules for Filing a Joint Return?
A joint Form 1 is not allowed if both spouses were not Massachusetts residents for the same portion of 2009.
If you are legally married, you have the option of filing either a joint return or a married filing separate return. Married taxpayers who file a joint return are allowed to claim the following exemptions, deductions and credits which married taxpayers filing separate returns may not claim:
- a deduction of $3,600 ($7,200 for two or more dependents) for a dependent member of household under age 12, or dependent age 65 or over as of December 31, 2009 (not you or your spouse) or a disabled dependent;
- No Tax Status if joint Massachusetts AGI was $16,400 or less plus $1,000 for each dependent;
- Limited Income Credit if joint Massachusetts AGI is between $16,400 and $28,700 plus $1,750 for each dependent;
- excess unused exemptions against interest income (other than interest from Massachusetts banks), dividends or capital gain income; and
- a senior circuit breaker tax credit which allows senior citizens meeting certain eligibility criteria to claim a refundable credit on their state income taxes for the real estate taxes paid on the Massachusetts residential property they own or rent, and which they occupy as their principal residence. The credit is the amount by which the real estate tax payment or 25% of the rent constituting real estate tax payments exceeds 10% of their total income, but not more than $960. The credit is refundable to the extent the credit exceeds the taxpayer’s tax liability.
If your spouse died during 2009, you may still choose to file a joint return.
How Do I File a Decedent’s Return?
A final income tax return must be filed for a taxpayer who died during the taxable year. This return should include income received until date of death. It must be signed and filed by his/her executor, administrator or surviving spouse for the portion of the year before the taxpayer’s death. Be sure to fill in oval 1 if the taxpayer who was listed first on last year’s income tax return is deceased, or oval 2 if the taxpayer who was listed second on last year’s income tax return is deceased. Also, enclose Form M-1310 with the refund claimant’s name and Social Security number clearly printed.
A joint return may be filed by a surviving spouse. In the case of the death of both spouses, a final return must be filed by their legal representative.
Line by Line Instructions
Any income received for the decedent for the taxable year after the decedent’s death, and for succeeding taxable years until the estate is completed, must be reported each year on Massachusetts Form 2, Massachusetts Fiduciary Income Tax Return. Form 2 is available online at www.mass.gov/dor.
If the decedent’s return shows a refund due, and if the Probate Court has not appointed a legal representative and none is contemplated, a Massachusetts Form M-1310, Statement of Claimant to Refund Due on Behalf of Deceased Taxpayer, must be enclosed with the return so the refund check may be made payable to the proper person.
Should I Make Estimated Tax Payments in 2010?
Every resident or nonresident who expects to pay more than $400 in Massachusetts income tax on income which is not covered by Massachusetts withholding must pay Massachusetts estimated taxes. Estimated tax payments can be made online by using Web Services for Income by visiting www.mass.gov/dor or by filing Massachusetts Form 1-ES. See line 38 instructions and TIR 04-25 for more information.
When to File Your Return
Your Massachusetts Form 1 is due on or before April 15, 2010.
Automatic Extension Granted if 100% Tax Due is Paid by Tax Return Due Date
If line 3 of the Extension Worksheet on page 3 is “0” and 100% of the tax due for 2010 has been paid through:
- timely estimated payments of tax;
- credits from your 2009 return; and
- an overpayment from the prior tax year applied to the next year’s estimated tax,
you are no longer required to file Form M-4868, Application for Automatic Extension of Time to File Massachusetts Income Tax Return. However, if you do choose to file Form M-4868 in this instance, you must do so electronically, via DOR’s website. See TIR 06-21 for more information.
Also, if you owe no tax or you are making a payment of $5,000 or more, you are required to file your extension via the web. If you are making a payment of less than $5,000, you also have the option of filing your extension electronically. If there is a tax due with your extension, payment can be made through Electronic Funds Withdrawal.
Visit www.mass.gov/dor to file via the Web.
Note: Your extension will not be valid if you fail to pay 80% of your total tax liability through withholding, estimated tax payments or with your extension. Form M-4868 is available at www.mass. gov/dor or by calling (617) 887-MDOR or toll-free in Massachusetts 1-800-392-6089.
Must I File on a Calendar Year Basis?
No. You may file on a fiscal year basis if you keep your books and records on that fiscal year basis and if you receive permission from the Commissioner of Revenue. If you file on a fiscal year basis, you must file on or before the fifteenth day of the fourth month after the end of your fiscal year. Taxpayers filing on a fiscal year basis must complete and file Form 13, Notice of Designation of Fiscal Year, available at www.mass.gov/dor or by calling (617) 887-MDOR or toll-free in Massachusetts 1800- 392-6089.
What Should I Do If I Make a Mistake or Leave Something Off My Return?
If, after filing your income tax return, you receive an additional tax statement or discover that an error was made, do not submit a second tax return. If corrections are necessary, go to www. mass.gov/dor and use DOR’s online abatement application or file Form CA-6, Application for Abatement/ Amended Return. Form CA-6 is available at www.mass.gov/dor, or you may have one mailed to you by calling (617) 887-MDOR or toll-free in Massachusetts 1-800-392-6089.
What If I am Unable to Pay?
If you are unable to pay the full amount of tax that you owe, you should pay as much of your tax liability as possible with this return. You will receive a bill from the Department for the remaining amount of tax due plus accrued interest and penalty charges. If the amount of that bill is less than $5,000 and you still cannot pay it in full, you must apply formally to the Department for a small payment agreement in order to avoid collection activity. You can apply for a small payment agreement by visiting Web Services for Income at www.mass.gov/dor.
Note: Do not mail your request for a payment agreement with your tax return. Requests can be made once a bill is received through DOR’s Web Services for Income application at www.mass. gov/dor or by calling the Department at (617) 887MDOR or toll-free in Massachusetts 1-800-3926089 using the Department’s Interactive Voice Response (IVR) system. Setting up a small payment agreement will allow you to make monthly payments within a set time period to meet your unpaid liability.
Name and Address
Print the full name, address, and Social Security number of each person filing the return in the spaces provided. Enter names as they appear on your federal return. Be sure to retain the four-digit Personal Identification Number (PIN) printed on the back cover. You will need it to use DOR’s Web-based and/or Interactive Voice Response (IVR) applications, such as checking the status of your refund.
Social Security Number(s)
Be sure to enter your Social Security number(s) on your return. Also, enter your Social Security number on pages 2 and 3 of Form 1 and on page 2 of Schedules B or C, if filed. Failure to show the correct Social Security number in the space provided will delay the processing of your return. If filing jointly, list your numbers in the order they appear on your federal return. Taxpayers filing their U.S. return using an Individual Taxpayer Identification number (ITIN) should enter that ITIN as their Social Security number in the appropriate space. Also, be sure your employer has listed the correct Social Security number on your Form W-2. If you are married, you must list your spouse’s Social Security number even if you are filing a separate return.
To apply for an SSN, you must complete Form SS-5. Form SS-5 is available online at www.social security.gov, from your local Social Security Administration (SSA) office, or by calling the SSA at 1800- 772-1213. It usually takes about 2 weeks to receive an SSN. If you are a nonresident or resident alien and you do not have and are not eligible to get an SSN, you must apply for an ITIN. For details on how to do so, see Form W-7 and its instructions. Form W-7 is available online at www.irs.gov or by calling the IRS at 1-800-829-1040. It usually takes about four to six weeks to receive an ITIN.
Be sure to fill in the appropriate oval if a taxpayer died during the taxable year. For further information, refer to the section “How Do I File a Decedent’s Return?”
If you legally changed your name or address in 2009, fill in the oval. If you changed your name, enclose a copy of your Social Security card or driver’s license showing your new name. Failure to include this documentation could delay processing of your return. If you move after filing, be sure to leave a forwarding address with your local post office and file a Change of Address Form with the Massachusetts Department of Revenue. This form is available to be filed online at www.mass.gov/dor, or by calling (617) 887-MDOR or toll-free in Massachusetts 1-800-392-6089.
Fill in the appropriate oval(s) for you, and/or your spouse if married filing a joint return, if you are a veteran who served in the Armed Forces of the United States in active service as part of Operation Enduring Freedom, Operation Iraqi Freedom or Operation Noble Eagle and were discharged under honorable conditions and were domiciled for six months in Massachusetts immediately prior to entry into the Armed Forces. The Department of Revenue will then forward the name and address to the Department of Veterans’ Services and the adjutant general of the Massachusetts National Guard to verify eligibility for any benefits you may be entitled to.
Voluntary Contribution to State Election Campaign Fund
You, and your spouse if filing jointly, may voluntarily contribute $1 each to the State Election Campaign Fund. The purpose of this fund is to provide limited public financing for campaigns of eligible candidates for statewide and elective office. This contribution will not change your tax or reduce your refund.
Fill in this oval if you are a “noncustodial parent.” A noncustodial parent is defined as a person who has a minor child, but does not live with the child.
Note: If you are the biological parent of a child, but your parental rights have been terminated, you are not the noncustodial parent of that child.
Schedule TDS - Inconsistent Filing Position Penalty
Fill in the oval and attach Schedule TDS, Taxpayer Disclosure Statement, if you are disclosing any inconsistent filing positions. Schedule TDS is available on our website at www.mass.gov/dor. The inconsistent filing position penalty (see TIR 06-5, section IV) applies to taxpayers that take an inconsistent position in reporting income. These taxpayers must “disclose the inconsistency” when filing their Massachusetts return. If such inconsistency is not disclosed, the taxpayer will be subject to a penalty equal to the amount of tax attributable to the inconsistency. This penalty is in addition to any other penalties that may apply.
A taxpayer is deemed to have taken an “inconsistent position” when the taxpayer pays less tax in Massachusetts based upon an interpretation of Massachusetts law that differs from the position taken by the taxpayer in another state where the taxpayer files a return and the governing law in that other state “is the same in all material respects” as the Massachusetts law. The Commissioner may waive or abate the penalty if the inconsistency or failure to disclose was attributable to reasonable cause and not willful neglect.
Under Age 18
If you are under age 18 as of January 1, 2010, be sure to fill in the oval(s).
Note: Lines without specific instructions are considered to be self-explanatory.
Line 1. Filing Status
Note: More than one filing status may apply to you. If so, you may wish to figure your taxes based upon more than one filing status to see which status is to your benefit.
Single - Fill in the “Single” oval if you were single as of December 31, 2009. This status applies to you if at the close of the taxable year you fit into any of the following categories:
- you were unmarried;
- you were a widow or widower whose spouse died before 2009; or
- you were legally separated under a final judgment of the probate court.
Please note that you are not single if: (1) you have obtained a judgment of divorce which has not yet become final; (2) you have a temporary support order; or (3) you and your spouse simply choose to live apart.
Married Filing Joint Return - Fill in the “Married filing joint return” oval if you were legally married as of December 31, 2009. Both spouses are responsible for the accuracy of all information entered on a joint return and both must sign. A joint return is allowed even if only one spouse had income or if one spouse died during 2009. For further information, refer to the section “What Are the Rules for Filing a Joint Return?”
Note: Same-sex spouses filing a Massachusetts joint return must combine their figures from their separate U.S. returns. See TIR 04-17 for more information.
Married Filing Separate Return - Fill in the “Married filing separate return” oval if you were legally married as of December 31, 2009, and if you and your spouse are not filing a joint return. Be sure to enter your spouse’s Social Security number in the space provided.
Head of Household - Fill in the “Head of household” oval if you qualify to file this status federally. This status is for unmarried people who paid over half the cost of keeping up a home for a qualifying person, such as a child who lived with you or your dependent parent. See TIR 04-17 for Massachusetts differences. Certain married people who lived apart from their spouse for the last six months of 2008 may also be able to use this status. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information, for more information.
Whole Dollar Method Required
The Department of Revenue requires that the whole dollar method be used for entries made on forms or schedules. For example, amounts between $1.00 and $1.49 should be entered as $1.00 and amounts between $1.50 and $2.00 should be entered as $2.00. However, calculations on worksheets used to reach amounts shown on the return may be made in one of two ways: (1) round amounts before adding them up and enter the resulting total on the form, or (2) add amounts to the penny, and then round to the whole dollar for entry on the form. Either method is acceptable as long as one method is used consistently throughout the return.
Line 2. Exemptions
Line 2a: Personal Exemptions
Each taxpayer is entitled to claim a personal exemption. The amount of your personal exemption depends on your filing status in line 1.
- If you are single or married filing a separate return, enter $4,400 in line 2a.
- If filing as head of household, enter $6,800 in line 2a.
- If married filing a joint return, enter $8,800 in line 2a.
Line 2b: Number of Dependents
You may claim a $1,000 exemption for each of your dependents if you claimed them on your U.S. return. Enter in the box in item b the number of dependents you listed on U.S. Form 1040, line 6c or U.S. Form 1040A, line 6c. Do not include yourself or your spouse. Then, multiply that total by $1,000 and enter the total amount in line 2b. Be sure to fill out Schedule DI, Dependent Information, if you are claiming a dependent exemption( s). Failure to do so will delay the processing of your return.
Note: In a few cases, the number of dependents claimed for Massachusetts purposes and for U.S. purposes may differ. Massachusetts allows a dependent exemption for each individual who qualifies for exemption as a dependent under sec. 151(c) of the Code. For purposes of sec. 151(c), the definition of dependent in sec. 152 is adopted. Under federal law, there are additional restrictions on the dependent exemption beyond the rules of sec. 152 that are not adopted by Massachusetts. For Massachusetts tax purposes, if an individual qualifies as a dependent under the rules of sec. 152, you can claim a dependent exemption for such a person. If you claim such a dependent in Massachusetts, increase the number reported in item b from your U.S. return by the number of such additional dependents. Also, same-sex joint filers should combine the number of dependents from their federal returns to arrive at the number of Massachusetts dependents. See TIR 04-17 for more information.
Line 2c: Age 65 or Over Before 2010
You are allowed an additional $700 exemption if you were age 65 or over before January 1, 2010. If your spouse was age 65 or over and you are filing a joint return, you may also claim a $700 exemption for your spouse. Fill in the appropriate oval(s) and enter the total number of persons age 65 or over in the small box. Multiply that total by $700 and enter the total in line 2c.
Line 2d: Blindness Exemption
You are allowed an additional $2,200 exemption if you are legally blind. If your spouse is also legally blind and you are filing a joint return, you may also claim a $2,200 exemption for your spouse. Fill in the appropriate oval(s) and enter the total number of blindness exemptions in the small box. Multiply that total by $2,200 and enter the total in line 2d.
Legal Definition of Blindness. You are legally blind and qualify for the blindness exemption if your visual acuity with correction is 20/200 or less in the better eye, or if your peripheral field of vision has been contracted to a 10-degree radius or less, regardless of visual acuity.
Line 2e: Other: Medical/Dental Expenses and Adoption Agency Fee
You may claim an exemption for medical and dental expenses paid during 2009 only if you itemized these expenses on your U.S. Form 1040, Schedule A. If you are married filing a joint U.S. Form 1040, you must file a joint Massachusetts Form 1 to claim this exemption. Enter in line 2e, item 1 the amount reported on your U.S. Form 1040, Schedule A, line 4.
Note: Same-sex joint filers should recalculate their U.S. Form 1040, Schedule A by combining allowable expenses as reported on U.S. Form 1040, Schedule A, line 1 and their adjusted gross incomes as reported on U.S. Form 1040, Schedule A, line 2 in calculating U.S. Form 1040, Schedule A, line 4. If you paid adoption fees to a licensed adoption agency during 2009, you are eligible for an exemption of the total amount of the fees paid during the year. Fees paid during 2009 to an agency licensed to place children for adoption on account of the adoption process of a minor child regardless of whether an adoption actually took place during 2009 should also be included for this exemption. Enter this amount in line 2e, item 2.
Add items 1 and 2 and enter the total in line 2e.
Line 2f: Total Exemptions
Add items 2a through 2e and enter the total in line 2f. This amount should also be entered on line 18 of Form 1.
Note: DOR and the IRS maintain an extensive exchange program, routinely sharing computer tapes and audit results. Discrepancies between income, deductions, and schedules reported federally and on this return, except those allowed under state law, will be identified and may result in a state audit or further investigation.
Line 3. Wages, Salaries, Tips and Other Employee Compensation
Report in line 3 total state wages and allocated tips from Form(s) W-2. Income earned by a Massachusetts resident in another state is subject to taxation in Massachusetts. Generally, your total wages and allocated tips will be the same amount reported on your U.S. 1040 or 1040A, line 7; or 1040EZ, line 1. Following are instances that require an adjustment to these amounts.
Massachusetts Legal Residents Working in a Foreign Country. Income earned by a Massachusetts resident in a foreign country is subject to taxation in Massachusetts. If you excluded part or all of the compensation earned in a foreign country on your U.S. return (under Section 911 of the U.S. IRC), you must include any such amount in line 3 for Massachusetts tax purposes.
State or Local Employees Contributing to Pension Plans. If you are a Massachusetts state, city, town or county employee and contributed to your pension plan, enter in line 3 the Massachusetts W-2 state wage amount. This is generally box 16 of Form W-2. This amount will be higher than the U.S. amount because your pension contributions are excluded from your income for U.S. tax purposes. Contributions up to $2,000 per taxpayer may still be deducted in lines 11a and/or 11b.
Line 4. Taxable Pensions and Annuities
Income from most private pensions or annuity plans is taxable in Massachusetts. Certain government pensions, however, are exempt under Massachusetts law. In general, exempt pensions include contributory pensions from the U.S. Government or the Commonwealth of Massachusetts and its political subdivisions, and noncontributory military pensions. The following section describes some specific pensions which are exempt. If your pension is exempt, enter “0” in line 4 and note the source on the dotted line to the left.
If your pension is not exempt, you should generally enter in line 4 the taxable amount reported on your U.S. Form 1040, line 16b, or U.S. Form 1040A, line 12b. In some cases, however, Massachusetts law requires an adjustment to the federal amount. Distributions from annuity, stock bonus, pension, profit-sharing or deferred payment plans or contracts described in Sections 403(b) and 404 of the U.S. IRC must be adjusted to account for your contributions that have been previously taxed. Subtract from such income (as reported on your U.S. Form 1040, line 16a, or U.S. Form 1040A, line 12a) the amount of your contributions which was previously taxed by Massachusetts until the total of your taxed contributions is received. If your pension falls into this category, enter the adjusted amount in line 4. If you are receiving distributions from an IRA or Keogh plan, do not report the income here; instead, see the instructions for Schedule X, line 2.
Note: Massachusetts does not tax Social Security income; therefore, you should not report such income on Massachusetts Form 1.
What pensions are exempt?
- Pension income received from a contributory annuity, pension, endowment or retirement fund of the U.S. Government or the Commonwealth of Massachusetts and its political subdivisions.
- Pensions from other states or its political subdivisions which do not tax such income from Massachusetts or its political subdivisions may be eligible to be deducted from Massachusetts taxable income. This pension income, however, should be reported in line 4. Refer to Schedule Y, line 13 instructions to determine eligibility for this deduction.
- Noncontributory pension income or survivorship benefits received from the U.S. uniformed services (Army, Navy, Marine Corps, Air Force, Coast Guard, commissioned corps of the Public Health Service and National Oceanic and Atmospheric Administration) is exempt from taxation in Massachusetts.
- Massachusetts state court judges who were appointed on or after January 2, 1975 are participants in the Massachusetts contributory retirement system and their pensions are nontaxable. State court judges who were appointed prior to January 2, 1975 receive taxable noncontributory pensions.
If you retired under Chapter 32, Sections 56–60 of Massachusetts General Laws and are a veteran who began Massachusetts state service prior to July 1, 1939, all or part of your pension income may be subject to tax. If you elected to receive your proceeds from contributions in one lump-sum distribution, your original contributions to the retirement system are not taxable. Noncontributory pension income received after a lump-sum distribution is fully taxable and should be reported in line 4.
How do I report lump-sum distributions?
If you were an employee of the U.S., Massachusetts or one of its political subdivisions and left public employment prior to retirement, you are not required to report as income the lump-sum distribution of your previously taxed pension contributions.
Lump-sum distributions of qualified employee benefit plans in excess of the employee’s contributions which were previously subject to Massachusetts tax (or not previously excluded from Massachusetts tax) must be reported in line 4. Generally, qualified rollovers are not taxable in Massachusetts to the extent they are not taxable on your U.S. return. Lump-sum distributions related to IRA/Keogh and Roth IRA distributions should be reported in line 9.
Rollover from a traditional IRA to a Roth IRA. Taxpayers with $100,000 or less in federal adjusted gross income are allowed to make partial or complete rollovers from existing IRAs to Roth IRAs. Any taxable portion of these rollovers included in federal gross income is also included in Massachusetts gross income, except for amounts previously subject to Massachusetts personal income tax. See Schedule X, line 2 instructions for further details.
Line 5. Interest from Massachusetts Banks
Enter in line 5a the total amount of interest received or credited to deposit accounts (term and time deposits, including certificates of deposit, savings accounts, savings shares, and NOW accounts) in Massachusetts banks. Then, enter your exemption amount in line 5b (if married filing jointly, enter $200; otherwise, enter $100). Subtract line 5b from 5a and enter the result in line 5, but not less than “0.”
Note: This exemption amount does not apply to your U.S. tax return.
Do not subtract interest forfeited or penalties charged to you for early savings withdrawal. You will be allowed to deduct these amounts on Schedule Y, line 2. All other interest, unless exempt, should be entered on Massachusetts Schedule B. Interest on an IRA/Keogh is not taxable until distributed.
Lines 6, 7 and 10. If showing a loss in lines 6, 7 or 10, be sure to mark over the “X” in the box to the left. Do not use parentheses or negative signs to indicate losses.
Line 6. Business/Profession or Farm Income or Loss
Enter in line 6 the amount of income or loss from a business or profession from Massachusetts Schedule C, line 31. You must enclose Massachusetts Schedule C with this return. Also, enclose a copy of your U.S. Schedule C-EZ if substituting U.S. Schedule C-EZ for Massachusetts Schedule C.
Note: U.S. Schedule C is no longer allowed as a substitute for Massachusetts Schedule C. However, you may substitute U.S. Schedule C-EZ for Massachusetts Schedule C if there are no differences between the amounts reported on U.S. Schedule C-EZ and amounts that would be reported on Massachusetts Schedule C. Be sure to write “No Massachusetts Differences” on the top of the U.S. Schedule C-EZ.
If you operate a farm as an individual or cooperative, enter the amount of income or loss from operating a farm from U.S. Schedule F, Profit or Loss from Farming, line 36. Enclose a copy of U.S. Schedule F. Complete a pro-forma U.S. Schedule F to report Massachusetts differences, such as bonus depreciation.
Line 7. Rental, Royalty, REMIC, Partnership, S Corporation, Trust Income or Loss
For tax years beginning on or after January 1, 2009, any taxpayer with income or loss reported on a Schedule E must file his or her tax return using computer-generated forms produced by third- party software. The tax return may be generated by the taxpayer or by a tax professional. The taxpayer is encouraged, but not required, to submit the return electronically. Paper forms produced using the third-party software product will contain a two-dimensional (2D) bar code and will also be accepted. If the taxpayer hires an income tax pre- parer to complete the taxpayer’s taxes, the preparer must follow the Commissioner’s electronic filing rules. See TIR 08-22 for more information.
If you do not have access to a software package when filing your 2009 income tax return, you may file your Schedule(s) E on paper. Visit our website at www.mass.gov/dor to download a paper copy of the 2009 Schedule(s) E (and instructions) to file with your income tax return.
Line 8a. Unemployment Compensation
Partial Exclusion of Unemployment Compensation. For federal income tax purposes, pursuant to IRC sec. 85(c), individuals must include in gross income any unemployment compensation received under the laws of the U.S. or any state. Under the ARRA, up to $2,400 of unemployment compensation benefits received in 2009 are excluded from federal gross income by the recipient. Massachusetts follows the provisions of IRC sec. 85(c) as amended and in effect on January 1, 2005. Massachusetts does not adopt the partial exclusion of unemployment compensation because it was enacted after January 1, 2005.
If you received unemployment compensation, enter in line 8a the amount from box 1 of all Forms 1099-G, Certain Government Payments. If you elected voluntary withholding of Massachusetts state income taxes on your unemployment compensation, be sure to include the amount of Massachusetts state income tax withheld, as reported on Form 1099-G, on Form 1, line 36 and attach with a single staple, where indicated on the return, Form 1099-G.
Note: DOR routinely matches the amounts in line 8a with files from the Division of Unemployment Assistance.
Line 8b. Massachusetts State Lottery Winnings
Enter in line 8b all winnings from the Massachusetts state lottery. Do not enter less than “0.” You may only deduct the price of your winning ticket. Lottery losses claimed as itemized deductions on U.S. Form 1040, Schedule A are not allowed on your Massachusetts return.
Note: DOR routinely matches the amounts in line 8b with files from the Lottery Commission.
Line 9. Other Income (from Schedule X)
Alimony Received, Taxable IRA/Keogh and Roth IRA Conversion Distributions, Other Gambling Winnings, Fees and Other 5.3% Income. “Other 5.3% income” includes the items listed above and must be included on Schedule X. Enter the total from Schedule X, line 5. Not less than “0.” Be sure to enclose Schedule X with your return. Failure to enclose this schedule will delay the processing of your return.
Lines 11 through 15
Massachusetts allowable deductions differ from “Itemized Deductions” on Schedule A of U.S. Form 1040. You may claim only the deductions specified on Massachusetts Form 1, lines 11 through 14 and Schedule Y.
Please read the instructions for lines 12 and 13 to determine which deduction you qualify for or which is better for you. You cannot claim a deduction in both lines 12 and 13.
You are not allowed to deduct amounts unless they are directly related to income that is subject to taxation and reported on Massachusetts Form 1.
Line 11. Amount Paid to Social Security (FICA), Medicare, Railroad, U.S. or Massachusetts Retirement Systems
If you have paid into any of the retirement systems listed above during 2009, you may deduct those contributions, up to a maximum of $2,000.
Enter in lines 11a and 11b the amount you, and your spouse if filing jointly, paid to Social Security (FICA), Medicare or Railroad Retirement and the U.S. or Massachusetts retirement systems during 2009 as shown on your Form W-2, but not more than $2,000 each. Payment amounts may not be combined or transferred from one spouse to the other. Be sure to add any amount of Medicare tax withheld as shown on Form W-2 and any amount of self-employment tax as reported on your U.S. Form 1040 to the amount of Social Security tax withheld, the total not to exceed $2,000 per person. Note: Medicare premiums deducted from your Social Security or retirement payments are not deductible.
Payments to an IRA, Keogh, Simplified Employee Pension Plan (SEP), or Savings Incentive Match Plan for Employees (SIMPLE) Account are not deductible for Massachusetts income tax purposes.
Line 12. Child Under Age 13, or Disabled Dependent/Spouse Care Expenses
Massachusetts allows taxpayers to exceed the federal limit on employment-related expenses for the care of a qualified child under the age of 13, a disabled dependent or a disabled spouse. The maximum deduction is $4,800 for one qualifying individual, and $9,600 for two or more qualifying individuals. Complete the following worksheet to calculate your Massachusetts child or disabled dependent/ spouse care expense deduction.
Note: You cannot claim this deduction if married filing a separate U.S. 1040 or 1040A return. If you are filing a joint U.S. 1040 or 1040A return but are married filing separately for Massachusetts purposes, either spouse may claim the deduction for expenses he or she incurred, but their combined deduction cannot exceed $4,800 for one qualifying individual or $9,600 for two or more qualifying individuals.
Taxpayers who received dependent care benefits should complete a pro forma U.S. Form 2441 or U.S. Form 1040A, Schedule 2. When completing this pro forma form, taxpayers should enter $4,800 (or $9,600 for two or more qualifying persons) in line 30 of U.S. Form 2441 or line 23 of U.S. Form 1040A, Schedule 2. The amount from this pro forma Form 2441, line 34 or U.S. Form 1040A, Schedule 2, line 27 should then be entered in line 1 of the following worksheet.
Note: Same-sex joint filers should complete a pro forma U.S. Form 2441 or U.S. Form 1040A, Schedule 2. In addition to changing the maximum amount of the deduction allowed on U.S. Form 2441 or U.S. Form 1040A, Schedule 2 (see preceding paragraph), same-sex spouses should prepare the pro forma federal forms as though they were filing a joint federal return. See TIR 04-17 for more information.
Line 12 Worksheet — Child Under 13 or Disabled Dependent/Spouse Care Deduction
Use this worksheet to calculate your Massachusetts child under age 13 or disabled dependent/spouse care deduction.
|1. Enter the amount of qualified expenses you incurred and paid in 2009 for a qualifying person(s). This amount may exceed the federal limit of $3,000 for one qualifying person or $6,000 for two or more persons. However, do not enter more than $4,800 for one qualifying person or $9,600 for two or more persons . . .||_________|
|2. Enter the amount from U.S. Form 2441, line 4, or U.S. Form 1040A, Schedule 2, line 4 . . . .||_________|
|3. Enter the amount from U.S. Form 2441, line 5, or U.S. Form 1040A, Schedule 2, line 5 . . .||_________|
|4. Enter the smallest of line 1, 2 or 3 . . .||_________|
|5. If you paid 2008 expenses in 2009, enter the amount of the allowed 2008 expenses used to compute the credit on U.S. Form 2441, line 9, or U.S. Form 1040A, Schedule 2, line 9. Otherwise, enter “0” . . . .||_________|
|6. Add lines 4 and 5. Not to exceed more than $4,800 for one qualifying person or $9,600 for two or more persons. Enter here and in Form 1, line 12 . . .||_________|
Note: If you choose to take a deduction in line 12, you cannot take the deduction in line 13.
Line 13. Dependent Member(s) of Household Under Age 12, or Dependents Age 65 or Over (not you or your spouse) as of December 31, 2009, or Disabled Dependent
You may deduct $3,600 for a dependent member of household, or $7,200 for two or more dependents, under age 12, or dependent age 65 or over (not you or your spouse) as of December 31, 2009, or disabled dependent. Enter the number of qualified dependents in line 13a, not to exceed two, and multiply that amount by $3,600. Enter the result in line 13. Only if single, head of household or married filing jointly. You cannot claim this deduction if married filing a separate return.
Note: You may claim an amount in line 13 only if there is no entry in line 12.
Line 14. 50% Rental Deduction
You may be entitled to a rental deduction equal to one-half (50%) of the rent you paid during 2009 (up to a maximum of $3,000 per return) for your principal residence in Massachusetts. Enter the total amount of qualified rent paid by you during 2009 in line 14a. Divide line 14a by 2 and enter the result, or $3,000 ($1,500 if married filing a separate return) - whichever is smaller - in line 14.
Note: This deduction amount does not apply to your U.S. tax return.
What Qualifies for the Rental Deduction?
The deduction must be for rent you paid to a landlord for the rental or lease of your principal residence in Massachusetts.
If two or more persons jointly rent a unit, each occupant using it as his/her principal residence is entitled to a deduction based on the amount of rent that each person paid.
If the rent is paid by a third party (such as a parent) who maintains a principal residence elsewhere, no 50% rental deduction is allowed for either party.
A principal residence does not include any residence for vacation, an apartment for a person on a temporary assignment or a student or faculty member who has a principal residence elsewhere. It also does not include any apartment or house in Massachusetts of a nonresident who has a legal residence in another state or country.
Payment for occupying a hotel, motel or rooming house is not considered rent unless a rental agreement exists. All separately stated charges such as utilities, furnishings or parking cannot be included in rent for purposes of this deduction. Also, rent does not include any advance payments (such as security deposit, last month’s rent, etc.) until actually applied as rent.
How Do I Calculate My Rental Deduction If I Am Married Filing Separately?
If a husband and wife file separate returns, they are each entitled to a rental deduction equal to 50% of the rent each pays, not to exceed $1,500 per return. However, a married couple filing separately may allocate the rent deduction differently, provided the amount taken by each spouse does not exceed 50% of the rent actually paid by that spouse, and provided their combined rental deductions do not exceed $3,000. If the allocation results in one spouse claiming a deduction in excess of $1,500, that spouse must enclose with his/her return a statement signed by the other spouse indicating consent to the allocation. The statement must contain the name, address and Social Security number of the consenting spouse and the amount of rental deduction taken by that spouse.
Line 15. Other Deductions (from Schedule Y)
Enter the total from Schedule Y, line 16. Be sure to enclose Schedule Y with your return. Failure to do so will delay the processing of your return.
Line 17. 5.3% Income After Deductions
Subtract line 16 from line 10. Enter the result in line 17. If line 16 exceeds line 10, enter “0” in line 17.
Line 19. 5.3% Income After Exemptions
Subtract line 18 from line 17. If line 18 exceeds line 17, enter “0” in line 19.
If line 18 exceeds line 17 and you received interest income (other than interest from Massachusetts banks), dividends or capital gain income, complete the worksheet for Schedule B, line 36 and Schedule D, line 19, if applicable. All others proceed to line 20.
Line 20. Interest and Dividend Income
If you have any interest income other than interest from deposits in banks located in Massachusetts, dividend income in excess of $1,500, certain capital gains or losses, or any adjustments to interest income (other than interest from Massachusetts banks), you must complete Schedule B. Be sure to enclose Massachusetts Schedule B. To determine if you need to file Schedule B, refer to the Schedule B instructions in this booklet.
Enter in line 20 the amount from Schedule B, line 38. If not required to file Schedule B, enter dividend income of $1,500 or less (from U.S. Form 1040 or 1040A, line 9a) in line 20.
Tax on 5.3% Income
Line 22. 5.3% Tax (from Tax Table)
Based upon the amount in line 21, find the proper amount of tax in the blue table at the back of this booklet. Enter the tax in line 22. If line 21 is more than $24,000, multiply the amount in line 21 by .053 and enter the result in line 22. You must use the tax table if line 21 is $24,000 or less.
Note: Personal income tax forms must provide an election to voluntarily pay tax at a rate of 5.85% on taxable income which would otherwise be taxed at a rate of 5.3%. The election to pay tax at the rate of 5.85% does not apply to items of income taxed at 12% (short-term capital gains and gains on collectibles). If choosing the optional 5.85% tax rate, multiply line 21 and Schedule D, line 20 by .0585 and fill in the oval.
12% Income &Tax
Line 23. 12% Income from Certain Capital Gains
If you have any interest income other than interest from deposits in banks located in Massachusetts, dividend income in excess of $1,500, certain capital gains or losses, or any adjustments to interest income (other than interest from Massachusetts banks), you must complete Schedule B. Be sure to enclose Massachusetts Schedule B. To determine if you need to file Schedule B, refer to the Schedule B instructions in this booklet.
Enter in line 23a the amount from Schedule B, line 39. Multiply this amount by .12 (12%) and enter the tax in line 23.
Tax on Long-Term Capital Gains
Line 24. Schedule D (Long-Term Capital Gains and Losses Excluding Collectibles)
Enter in line 24 the amount from Schedule D, line 21, but not less than “0.” To determine if you need to file Schedule D, refer to the Schedule D instructions in this booklet.
Schedule B, Line 36 and Schedule D, Line 19 Worksheet — Exemptions from Interest and Dividend Income, 12% Income and Long-Term Capital Gain Income (Only if Single, Head of Household, or Married Filing Jointly)
If your total exemptions in line 18 are more than the amount of your 5.3% income after deductions in line 17, the excess may be applied against all your interest and dividend income and income taxed at 12%. Any remaining excess amount may then be applied against all your long-term capital gain income. Complete the following worksheet only if line 17 is less than line 18 to determine if you qualify for the excess exemption. Enter all losses as “0.”
|1. Enter amount from Schedule B, line 35. Not less than “0”. . .||________|
|2. Enter amount from Form 1, line 18 . . .||________|
|3. Enter amount from Form 1, line 17 . . .||________|
|4. Subtract line 3 from line 2. If “0” or less, you do not qualify for this exemption. Omit remainder of worksheet . . .||________|
|5. Excess exemptions applied against interest and dividend income and 12% income. If line 1 is larger than line 4, enter line 4 here and in Schedule B, line 36. If line 4 is equal to or larger than line 1, enter line 1 here and in Schedule B, line 36. Complete lines 6 through 8. . .||________|
|6. Subtract line 5 from line 4. If “0,” omit remainder of worksheet . . .||________|
|7. Enter Schedule D, line 18. Not less than “0”. . .||________|
|8. Excess exemptions applied against long-term capital gain income. If line 7 is larger than line 6, enter line 6 here and in Schedule D, line 19. If line 6 is equal to or larger than line 7, enter line 7 here and in Schedule D, line 19 . .||________|
Excess Exemptions. If excess exemptions were used in calculating lines 20, 23 or 24 (see Schedule B, line 36 and/or Schedule D, line 19), be sure to fill in the oval in line 24.
Line 25. Credit Recapture Amount
If any Brownfields Credit (BC), Economic Opportunity Area Credit (EOA), Low Income Housing Credit (LIH) or Historic Rehabilitation Credit (HR) property is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the total credit allowed for actual use must be added back to your tax on Form 1. Complete and enclose Schedule H-2, Credit Recapture. Schedule H-2 is available at www.mass.gov/dor or by calling (617) 887-MDOR or toll-free in Massachusetts 1-800-392-6089.
Massachusetts Adjusted Gross Income (AGI)
No Tax Status - Single, Married Filing a Joint Return or Head of Household Only. If your Massachusetts AGI was $8,000 or less if single, $14,400 or less plus $1,000 per dependent if head of household, or $16,400 or less plus $1,000 per dependent if married filing a joint return, you qualify for No Tax Status and are not required to pay any Massachusetts income taxes.
Limited Income Credit - Single, Married Filing a Joint Return or Head of Household Only. If you do not qualify for No Tax Status, but you are single and your Massachusetts AGI is between $8,000 and $14,000, or if you are filing as head of household and your Massachusetts AGI is between $14,400 and $25,200 plus $1,750 per dependent, or if you are married filing a joint return and your Massachusetts AGI is between $16,400 and $28,700 plus $1,750 per dependent, you may qualify for the Limited Income Credit. This credit is an alternative tax calculation that can result in a significant tax reduction for people whose income is close to the No Tax Status threshold.
Massachusetts AGI is not the same as taxable income. Massachusetts AGI includes:
- wages, salaries, tips;
- taxable pensions and annuities;
- pension income from another state or political subdivision before any deduction;
- taxable IRA/Keogh and Roth IRA distributions;
- fees and unemployment compensation;
- income or loss from a business or profession;
- income or loss from partnerships, S corporations and trusts;
- rents, royalties and REMIC income;
- alimony and other 5.3% income;
- interest from Massachusetts banks before exemptions; and
- other interest, dividends, and capital gains.
Complete the Massachusetts AGI Worksheet to see if you may qualify for the College Tuition Deduction (Schedule Y, line 11), No Tax Status or the Limited Income Credit.
Massachusetts AGI Worksheet
|1. Enter your total 5.3% income from Form 1, line 10. Not less than “0”* . . .||________|
|2. Enter the total of Schedule Y, lines 1 through 10. . .||________|
|3. Subtract line 2 from line 1. Not less than “0”. . . .||________|
|4. Enter total Massachusetts bank interest or the interest exemption amount, whichever is smaller, from Form 1, line 5a or line 5b . . .
Note: If Form 1, line 10 is a loss, do not complete line 4 above. Instead, combine Form 1, line 10 with the smaller amount of total Massachusetts bank interest or the interest exemption amount. Enter the result in line 4 above, unless the result is a loss. If the result is a loss, enter “0.”
|5. Enter amount from Schedule B, line 35. If there is no entry in Schedule B, line 35 or if not filing Schedule B, enter the amount from Form1, line 20 . . .||________|
|6. Enter the amount from Schedule D, line 18.** Not less than “0”. . . .||________|
|7. Add lines 3 through 6 . .||________|
If you are single and the total in line 7 is $8,000 or less, you qualify for No Tax Status (see line 26 instructions). If you are single but do not qualify for No Tax Status, and your total in line 7 is $14,000 or less, complete line 27 and see line 28 instructions for the Limited Income Credit. If you are filing as head of household or married filing a joint return, compare line 7 with the No Tax Status/Limited Income Credit chart to see if you may qualify for No Tax Status or the Limited Income Credit.
*Add back any Abandoned Building Renovation deduction claimed on Schedule(s) C and/or E before entering an amount in line 1.
**If filing Schedule D-IS, Installment Sales, see the Schedule D-IS instructions for the amount to enter in line 6. Schedule D-IS and instructions are available on DOR’s website at www. mass.gov/dor.
Line 26. No Tax Status
If you qualify for No Tax Status, fill in the oval in line 26, enter “0” in line 27 and omit lines 28 through 30. Also, enter “0” in line 31 and complete Form 1. However, if there is an amount entered in line 25, Credit Recapture Amount, enter that amount in line 27 and complete lines 29 and 30.
Note: If married filing separately, you do not qualify for No Tax Status.
Line 27. Total Tax
Add line 22 (5.3% tax), line 23 (12% tax), line 24 (tax on long-term capital gains) and line 25 (credit recapture amount). Enter the total in line 27.
Line 28. Limited Income Credit
Line 28 Worksheet — Limited Income Credit (Only if Single, Head of Household, or Married Filing Jointly)
|1. Enter amount from line 7 of Massachusetts AGI Worksheet . . .||________|
|2. Enter $8,000 if single. If married filing a joint return or head of household, enter the amount from the No Tax Status column of the No Tax Status/Limited Income Credit chart||________|
|3. Subtract line 2 from line 1. . .||________|
|4. Enter in line 4 the amount of tax from Form 1, line 27 . . .||________|
|5. Multiply line 3 by 10% (.10) . . .||________|
|6. If line 4 is smaller than line 5, you are not eligible for this credit. Enter “0.” If line 4 is larger than line 5, subtract line 5 from line 4 and enter the result here and in line 28 on Form 1. . . .||________|
Line 29. Other Credits (from Schedule Z)
Enter the total from Schedule Z, line 14. Be sure to enclose Schedule Z with your return. Failure to do so will delay the processing of your return.
Line 32. Voluntary Contributions
You may contribute any amount you choose to the following funds. Remember, these amounts are added to your tax. They increase the amount of your payment or reduce the amount of your refund.
a. Endangered Wildlife Conservation: The Natural Heritage and Endangered Species Fund is administered by the Division of Fisheries and Wildlife. Contributions are used to protect and restore rare and endangered wildlife and plants, and their habitats. This fund has helped restore and conserve in the Commonwealth populations of the Bald Eagle, Hessel’s Hairstreak Butterfly, the Redbelly Turtle and the Plymouth Gentian.
b. Organ Transplant Fund: The Organ Transplant Fund is administered by the Massachusetts Department of Public Health. All contributions received by the Fund assist patients with the costs of medications without which they might lose their transplanted organs. For information on how to become an organ donor, visit the Registry of Motor Vehicle’s website at www.mass.gov/rmv.
c. Massachusetts AIDS Fund: The Massachusetts AIDS Fund is administered by the Massachusetts Department of Public Health. Contributions are used for research, experimental treatment and education related to Acquired Immune Deficiency Syndrome (AIDS). Massachusetts residents living with AIDS receive experimental treatment through clinical trials which are wholly supported with this Fund. The Fund also educates people with AIDS about treatment options and how to gain access to medication and experimental treatment.
d. Massachusetts United States Olympic Fund: Contributions to this fund are used to assist Massachusetts residents in paying all or part of any costs associated with the development, maintenance and operation of the United States Olympic Team participating in the Olympics and the United States Paralympic Team participating in the Paralympics.
e. Massachusetts Military Family Relief Fund: The Massachusetts Military Family Relief Fund Is administered by the Friends of Massachusetts National Guard and Reserve Families. Contributions to this fund are used to help members of the Massachusetts National Guard and Massachusetts residents who are members of the reserves of the armed forces of the United States and who have been called to active duty after the September 11, 2001 terrorist attacks, and their families, to defray the costs of food, housing, utilities, medical services, and other expenses.
Add items a, b, c, d and e and enter the total in line 32.
Line 33. Massachusetts Use Tax Due On Out-of-State Purchases Made in 2009
A Massachusetts use tax is due on your taxable purchases of tangible personal property purchased for use in Massachusetts on which you did not pay Massachusetts sales or use tax. These include, but are not limited to, purchases made outof- state, on the Internet or from a catalog, where no Massachusetts sales tax was paid. The use tax does not apply to out-of-state purchases that are exempt from the sales tax (for example, clothing that costs $175 or less). Examples of taxable items include computers, furniture, jewelry, cameras,
appliances, and any other item that is not exempt. Generally, anyone who pays a sales or use tax to another state or territory of the United States on tangible personal property to be used in Massachusetts is entitled to a credit against the Massachusetts use tax, up to either 5% or 6.25%, depending on when the transaction occurred. This credit is allowed for sales or use tax paid to another state only if that state has a corresponding credit similar to the Massachusetts credit. See TIR 03-1 for more information. Prepare and retain with your records a list of your purchases in 2009 that are subject to the Massachusetts use tax.
Taxpayers may use the following table to self-report a “safe-harbor” amount of use tax based on their Massachusetts adjusted gross income. A taxpayer may pay this amount in lieu of the actual amount of use tax that would otherwise be due with respect to such purchases. Individual taxpayers electing to report use tax under this method will not be assessed additional use tax on audit, even if the actual amount of use tax due would have been greater than the amount from the schedule.
The estimated liability applies only to purchases of any individual items each having a total sales price of less than $1,000. For each taxable item purchased at a sales price of $1,000 or greater, the actual use tax liability for each purchase must be added to the amount of the estimated liability derived from the table below. See TIR 04-26.
Mass. AGI per return*
Use tax liability
$ 0–$ 25,000
25,001 – 40,000
40,001 – 60,000
60,001 – 80,000
80,001 – 100,000
Multiply Mass. AGI* by .0005
*From line 7 of Massachusetts AGI worksheet.
Complete the following worksheet to calculate your use tax if you are not self-reporting a “safe-harbor” amount. For more information about use tax, visit DOR’s website at www.mass.gov/dor.
Form 1, Line 33 Worksheet - Use Tax Due on Out-of-State Purchases
|1. Total of purchases in 2009 subject to Massachusetts use tax purchased between 1/1/09 and 7/31/09 . . .||_______|
|2. Total of purchases in 2009 subject to Massachusetts use tax purchased between 8/1/09 and 12/31/09 . . .||_______|
|3. 5% Use tax. Multiply line 1 by .05 (5%) . . .||_______|
|4. 6.25% Use tax. Multiply line 2 by .0625 (6.25%). . .||_______|
|5. Credit for sales/use tax paid to other states or jurisdictions between 1/1/09 and 7/31/09. Add the amount of any sales/use tax paid to another state or jurisdiction, or 5% of the sales price whichever is less, on each purchase reported inline 1 . . .||_______|
|6. Credit for sales/use tax paid to other states or jurisdictions between 8/1/09 and 12/31/09. Add the amount of any sales/use tax paid to another state or jurisdiction, or 6.25% of the sales price whichever is less, on each purchase reported in line 2 . . . .||_______|
|7. 5% Total amount due. Subtract line 5 from line 3. Not less than “0”. . .||_______|
|8. 6.25% Total amount due. Subtract line 6 from line 4. Not less than “0”. . . .||_______|
|9. Total amount due. Add line 7 to line 8. Not less than “0”. Enter result here and on Form 1, line 33 . .||_______|
Line 34. Health Care Penalty
If you are subject to the Health Care Penalty for 2009 and are not appealing the application of the penalty, enter the penalty amount from the line 8 of the Penalty Worksheet on page HC-7 in line 34a for you and/or line 34b for your spouse.
Note: If married filing a joint return and both you and your spouse are subject to the penalty, separate Penalty Worksheets must be filled out to calculate the separate penalty amounts for you and your spouse, using your married filing jointly income.
Line 36. Massachusetts Income Tax Withheld
This represents all income taxes withheld for the Commonwealth of Massachusetts as indicated on your copies of Forms W-2, W-2G, PWH-WA (promoter withholding), 2G, K-1 and certain 1099s, if applicable. Enter the total of all Massachusetts withholdings in line 36. Attach, with a single staple, state copies to your return; otherwise your claim of amounts withheld will not be allowed. If you have lost your state copy, ask the payer for a duplicate. Copies of 1099s need only be attached if they show an amount for Massachusetts tax withheld.
Line 37. 2008 Overpayment Applied to Your 2009 Estimated Tax
Include the exact amount of any 2008 overpayment you applied to your 2009 estimated taxes on your 2008 Massachusetts Form 1, line 45 or Form 1-NR/PY, line 50. Do not include any 2008 refund in this line.
Line 38. 2009 Massachusetts Estimated Tax Payments
If you paid Massachusetts estimated income tax for 2009, enter in line 38 the total of all Massachusetts estimated tax payments. Be sure to include any last quarter (of 2009) payment made on or be fore January 15, 2010. Do not include any 2008 overpayment applied to your 2009 estimated tax. Every resident who expects to pay more than $400 in Massachusetts income tax on income which is not covered by Massachusetts withholding must pay Massachusetts estimated taxes. Estimated tax payments can be made online by using Web Services for Income by visiting www.mass.gov/dor or by filing Massachusetts Form 1-ES.
Income which is not subject to withholding includes:
- salaries and wages where the employer is not subject to Massachusetts withholding;
- dividends and interest, including interest from Massachusetts banks;
- gains from capital assets;
- income from an individual trade, business, profession, partnership or S corporation;
- income from any estate or trust not taxed directly;
- certain pensions;
- taxable Keogh or IRA distributions;
- rental, royalty or REMIC income;
- unemployment compensation (from which no Massachusetts income tax was withheld);
- alimony received; . contributions to SIMPLE accounts;
- illegal income; and
- any other income received while a Massachusetts resident from which Massachusetts tax will not be withheld.
Generally, the first payment must be filed on or before April 15 of the taxable year. The estimated tax may be paid in full with the first payment or in four installments on or before April 15, June 15, September 15 of the current taxable year and January 15 of the following year.
If you wish to verify estimated tax payments that have already been made, check the Estimated Tax Payment History Application at www.mass.gov/dor. You will need to know the PIN that appeared on the back of your Form 1 booklet or the amount of last year’s refund or balance due to access your account.
You may request your employer to withhold additional amounts from your salary on Form M-4, Massachusetts Employee’s Withholding Exemption Certificate to cover the taxes on other income so that you do not have to file and pay estimated taxes.
If 80% of the tax is not paid throughout the year through withholding and/or estimated payments, a penalty may be imposed.
Line 39. Payments Made with Extension
If you filed Massachusetts Form M-4868, Application for Automatic Six-Month Extension of Time to File Massachusetts Income Tax Return, for 2009 on or before April 15, 2010, enter in line 39 the amount you paid with Massachusetts Form M-4868.
Line 40. Earned Income Credit
The earned income credit is a tax credit for certain taxpayers who work and have earned income under $48,279. Taxpayers who qualify for and claim the federal earned income credit are allowed a refundable credit equal to 15% of the federal amount. If the credit due the taxpayer exceeds the amount of the total income tax payable for the year by the taxpayer, the excess amount of the credit will be refunded to the taxpayer without interest. You must enter the number of qualifying children, if any, in line 40a. Then, enter the federal earned income credit amount from your U.S. Form 1040, line 64a, 1040A, line 41a; or 1040EZ, line 9a. Multiply this amount by .15 (15%) and enter the result in line 40. Be sure to fill out Schedule DI, Dependent Information, if you are claiming this credit for one or more qualifying children/dependents. Failure to do so will delay the processing of your return.
If you choose to have the IRS compute your federal earned income credit, wait until the IRS notifies you of that amount before making an entry in line 40. If you have not received your earned income credit amount as computed by the IRS by April 15, 2010, you may file Massachusetts Form M-4868, Application for Automatic Six-Month Extension of Time to File Massachusetts Income Tax Return. See page 3 for information about filing your extension via the Web. For more information about the federal earned income tax credit, see IRS publication 596, available at www.irs.gov.
Line 41. Senior Circuit Breaker Credit
Certain senior citizens in Massachusetts may be eligible to claim a refundable credit on their state income taxes for the real estate taxes paid on the Massachusetts residential property they own or rent and which they occupy as their principal residence. The maximum credit allowed is $960 for the tax year beginning January 1, 2009. If the credit due the taxpayer exceeds the amount of the total income tax payable for the year by the taxpayer, the excess amount of the credit will be refunded to the taxpayer without interest. To determine if you qualify for this credit, refer to the Senior Circuit Breaker Credit instructions in this booklet.
If you qualify for this credit and you are a homeowner, enter the amount from Schedule CB, Circuit Breaker Credit, line 17; if you are a renter, enter the amount from line 21. Be sure to complete and enclose Schedule CB with your return.
Line 42. Other Refundable Credits
Enter in line 42 the amount from Schedule RF, line 3.
Line 44. Overpayment
If line 35 is smaller than line 43, subtract line 35 from line 43 and enter the result in line 44. This is the amount of your overpayment. If line 35 is larger than line 43, go to line 47. If line 35 and line 43 are equal, enter “0” in line 46.
Line 45. Amount of Overpayment You Want Applied to Your 2010 Massachusetts Estimated Tax
Enter the amount of your 2009 overpayment that you wish to apply to your 2010 Massachusetts estimated tax. Once an election is made to apply your overpayment to your 2010 estimated tax, it cannot be refunded later or applied to any additional tax you may owe for 2009. The amount entered in this line can only be claimed as a credit on your 2010 Massachusetts return.
Line 46. Refund Amount
Subtract line 45 from line 44. Enter the result in line 46. This is the amount of your refund.
Note: Your state tax refund may be taxable on your U.S. tax return if you deducted state income tax paid as an itemized deduction on U.S. Schedule A.
Direct Deposit. You may elect to have your refund deposited directly into your savings or checking account. Check with your financial institution to make sure that it accepts direct deposit and verify the routing transit number (RTN) of the issuing financial institution. If we are unable to honor your request for a direct deposit, a paper check will be sent to you.
The routing number of your financial institution is nine digits and begins with 01 through 12 or 21 through 32. The account number can be up to 17 characters (both numbers and letters). Omit hyphens, spaces and special symbols. Enter the number from left to right and leave any unused boxes blank. You must enter the routing number and the account number in the spaces provided in line 46 if you are requesting direct deposit. Failure to do so will result in your request for direct deposit being denied. See sample check for location of this information.
Line 47. Tax Due
If line 35 is larger than line 43, subtract line 43 from line 35, and enter the result in line 47. This is the amount of tax you owe with your return. Pay in full with your return. Go to Web Services for Income at www.mass.gov/dor for online payment options. If you need to mail your payment, make your check or money order payable to the Commonwealth of Massachusetts and write your Social Security number on the front of your check or money order in the lower left corner. Complete and remove Form PV, Massachusetts Income Tax Payment Voucher, attached to the back of the envelope included in this booklet. Enclose the check and Form PV with your return. Form PV must be included with your check to ensure proper crediting of your account. Be sure to use the light blue mailing label when mailing your Form 1 with the Form PV.
Failure to file or failure to pay the proper amount of tax when due will result in an increasing amount of interest and penalties. It is to your advantage to file when your return is due, whether or not you are able to make full payment.
If you owe any interest, penalty or addition for the underpayment of estimated tax, add those amounts to the tax you owe and enter the total amount in line 47.
What Are Interest and Penalties?
Interest: If you fail to pay the tax when due, interest will be charged. For an explanation of how interest is compounded in Massachusetts, see TIR 92-6 or call the Customer Service Bureau at (617) 887-MDOR or toll-free, in Massachusetts at 1-800-392-6089.
Penalty for Late Payment: The penalty for late payment is 1% per month (or fraction thereof) of the tax due, up to a maximum of 25%.
Penalty for Failure to File: The penalty for failure to file a tax return by the due date is 1% per month (or fraction thereof) of the tax due, up to a maximum of 25%. If you were required to file a tax return for income received in any prior year and you did not file, you must file for that prior year.
Penalty for Protested (“Bad”) Payment: If your payment is not honored by your bank because of insufficient funds or any other reason, a penalty may be added of $30 or the amount of the payment, whichever is less.
Addition for Underpayment of Estimated Tax: You will generally be subject to this addition to tax if you did not have withholding and/or estimated payments equal to 80% of the total tax liability required to be paid and your 2009 tax due after credits and withholding is greater than $400. The 80% requirement is reduced to 662/3% for individuals who receive two-thirds of their income from fishing or farming. If you failed to meet these requirements, you must complete and enclose Massachusetts Form M-2210 to calculate the amount you must add to line 47. You do not have to complete Form M-2210 if the balance due with your return is $400 or less.
You may not be subject to an underpayment penalty if you qualify for one of the following exceptions:
- you are a qualified farmer or fisherman and are paying the full amount of the tax due on or before March 1, 2010;
- you were a Massachusetts resident and were not liable for 2008 taxes (where the taxable year was 12 months); or
- the sum of your estimated payments and withholding equals or exceeds your 2008 total tax due (where the taxable year was 12 months and a return was filed).
If you qualify for one of these exceptions, please fill in the oval marked “EX” under line 47 on Form 1 and enclose Form M-2210 indicating which of the exceptions applies to your circumstances.
A limited number of taxpayers may also qualify for a waiver of the underpayment penalty for one or more installments if:
- the underpayment was because of casualty or disaster; or
- during 2008 or 2009 you retired after reaching age 62 or became disabled and the underpayment was due to reasonable cause and not willful neglect.
If you think you qualify for one of these waivers, go to www.mass.gov/dor and use DOR’s online application for abatement/amended return at www.mass.gov/dor or enclose Form M-2210 and an explanatory statement with your return and fill in the oval marked “EX” under line 47. If your waiver is not for all four installments, complete Form M-2210 to calculate the underpayment penalty for the installments which are not covered by the waiver. Form M-2210 is available by visiting www.mass.gov/dor.
Penalty for Failure to Report Federal Change: If the U.S. Internal Revenue Service changes your income for a prior year (generally through audit), file an online application for abatement/amended return at www.mass.gov/dor within one year of the final federal determination to avoid this penalty. This penalty is equal to 10% of the additional tax due or $100, whichever is smaller. If the change indicates a refund, file an online application for abatement/ amended return within one year, including acceptance of an amended federal return by the Internal Revenue Service. Form CA-6, Application for Abatement, can also be downloaded from DOR’s website at www.mass.gov/dor.
Now that you have completed Form 1, sign your name at the bottom of page 1 of Form 1. Your spouse must also sign if this is a joint return. Write the date you signed the return.
Note: Be sure to include all three pages of Form 1, as well as Schedule HC.
Attach to your Form 1, with a single staple, all state copies of your Forms W-2, W-2G, PWH-WA, 2G and any Forms 1099 which included Massachusetts withholding. If making a payment, be sure to enclose Form PV with your Form 1. Form PV is attached to the back of the envelope found in this booklet. Form PV must be included with your check to ensure proper crediting of your account. Make your check or money order payable to Commonwealth of Massachusetts and be sure to sign the check and write your Social Security number on it. Also, be sure to use the light blue mailing label when mailing your Form 1 with the Form PV.
Paid Preparer Must Sign Your Return. Generally, anyone you pay to prepare your return must sign it in the space provided. Tax return pre- parers are authorized to sign the return by means of a rubber stamp, mechanical device, or computer software program, which must include either a facsimile or printed name of the preparer. Preparers are personally responsible for affixing their signatures to returns. Preparers must also provide their Social Security Number (SSN) or Preparer Tax Identification Number (PTIN) and Employer Identification Number (EIN) in the spaces provided. The preparer must give you a copy of the return for your records. Someone who prepares your return but does not charge you should not sign your return.
Paid Preparer Authorization. If you want to allow the Massachusetts Department of Revenue (DOR) to discuss your 2009 tax return with the paid preparer who signed it, fill in the “Yes” oval in the signature area of the return. This authorization applies only to the individual whose signature appears in the “Paid Preparer” section of your return. It does not apply to the firm, if any, shown in that section.
If you fill in the “Yes” oval, you, and your spouse if filing a joint return, are authorizing DOR to call the paid preparer to answer any questions that may arise during the processing of your return. You are also authorizing the paid preparer to:
- give DOR any information that is missing from your return;
- call DOR for information about the processing of your return or the status of your refund or payment( s); and
- respond to certain DOR notices that you have shared with the preparer about math errors, offsets and return preparation. The notices will not be sent to the preparer.
You are not authorizing the paid preparer to receive any refund check, bind you to anything (including any additional tax liability), or otherwise represent you before DOR. If you want to expand the paid preparer’s authorization, see Form M-2848, Power of Attorney and Declaration of Representative. Form M-2848 is available by visiting www.mass.gov/dor.
The authorization cannot be revoked. However, the authorization will automatically end no later than the due date (without regard to extensions) for filing your 2010 tax return. This is April 15, 2011 for most people.
E-File Opt Out. For tax years beginning on or after January 1, 2005, income tax return preparers who completed 100 or more original Massachusetts Forms 1 and 1-NR/PY, including those E-filed, during the previous calendar year are required to use electronic means to file all personal income tax returns, unless the taxpayer specifically directs on the paper form that the filing be on paper and signs Form EFO, Personal Income Tax Declaration of Paper Filing. Fill in oval if you do not want your preparer to file your return electronically. See TIR 04-30 for more information.
Mailing. If you are expecting a refund or if you have no tax due, use the white mailing label on the back of the envelope that came with this booklet. If you do not have one, mail Form 1 to: Massachusetts Department of Revenue, PO Box 7000, Boston, MA 02204-7000. If using a tax software product, be sure to use the correct PO box. See page 3.
If you have a tax due, use the light blue mailing label on the back of the envelope that came with this booklet. If you do not have one, mail Form 1 to: Massachusetts Department of Revenue, PO Box 7003, Boston, MA 02204-7003. If using a tax software product, be sure to use the correct PO box. See page 3.
Note: Schedule lines without specific instructions are considered to be self-explanatory. Be sure to list on each schedule the name and Social Security number that appears first on Form 1. Do not cut or separate schedules.
Massachusetts Tax Help Links
- » Massachusetts Form 1
- » Massachusetts Form M-2210
- » Massachusetts Form M-8453
- » Massachusetts Form PV
- » Massachusetts Schedule B
- » Massachusetts Schedule C
- » Massachusetts Schedule CB
- » Massachusetts Schedule D
- » Massachusetts Schedule DI
- » Massachusetts Schedule E
- » Massachusetts Schedule EC
- » Massachusetts Schedule X/Y
- » Massachusetts Schedule Z
- » Additional Massachusetts forms
- » Additional Massachusetts State Income Tax Return Form, e-File, and Government Information
- » Access tax help for additional states