Terranova & Associates, LLC strives to keep our clients up to date during these unprecedented times with the fluid Government COVID - 19 tax changes that will affect you.
Here is the press release from Governor Baker’s office:
On April 1, 2021, Governor Baker signed legislation which allows taxpayers with household income up to 200% of the federal poverty level to deduct up to $10,200 of unemployment compensation from taxable income on their Massachusetts tax return. The deduction may be claimed by each eligible individual for tax years 2020 and 2021. Federal law allows a deduction of up to $10,200 if your federal adjusted gross income is less than $150,000. Since the Massachusetts income threshold is different from the federal income threshold, you may be eligible for a deduction on your federal tax return, but not on your Massachusetts tax return.
If you have already filed your 2020 Massachusetts income tax return and you believe you are eligible for this deduction, there is no need to file an amended return. The Massachusetts Department of Revenue (DOR) will recalculate all tax returns that included unemployment income and will adjust your return if you are eligible. If your return is adjusted, your reported tax for 2020 will be reduced and you may be entitled to a refund. If you have no outstanding liabilities, DOR will mail the refund directly to you. DOR expects to begin issuing these refunds in mid-May and will provide updates about when you can expect to receive them in the FAQs on their website.
If you have not filed your 2020 Massachusetts income tax return yet, you should report the full amount of your unemployment income on your Massachusetts return using line 8a on resident tax returns (Form 1) or line 10a on nonresident/part-year resident tax returns (Form NR/PY). If you are eligible for a deduction, you should report the amount of the allowable deduction on Schedule Y, line 9.
You can find more information about the new deduction in the FAQs on DOR’s website. If you have any other questions or concerns, please contact DOR at (617) 887-6367 or online through your MassTaxConnect account.
As additional information becomes available, we will provide additional updates.
We are available for consultations regarding this and other tax matters if you need assistance, please contact us. We are excited to welcome the new clients that have retained our services!
This is our update as of this time and we will strive to keep you informed; please keep in mind this is a fluid topic and subject to change at any time.
This information should be used to strategically navigate through the months ahead. We are in the office and are happy to assist you.
Please feel free to share this with your relatives and friends and remember we are here to help our clients during this difficult time.
Terranova & Associates, LLC.
Thomas D. Terranova, Jr., CPA, PFS, CITP
150A Andover Street, Ste 11C
Danvers, MA 01923
Tel: (978) 774-7700 X 104, Fax: (978) 774-7705
E-mail: tomt@terranovacpa.com
Visit us on the WEB for tax and financial news; as well as other information at www.terranovacpa.com.
Follow us on Facebook and LinkedIn:
In sending this e-mail, Terranova & Associates, LLC assumes, no duty to perform professional services. No professional services will be undertaken prior to issuance of a written communication from our office confirming the scope of services to be rendered and the terms and conditions applicable to the engagement. In addition, while Terranova & Associates, LLC and its employees routinely communicate with others via e-mail, this communication does not constitute a professional service to any parties other than addresses of this message that have previously received a written communication from our office confirming our agreement to perform such services.
Information contained in this communication is confidential, may be attorney-client privileged and is intentioned solely for the use of the addressee. Unauthorized use, disclosure or copying is strictly prohibited. If you have received this communication in error, please notify me immediately at (978) 774 7700
Comments