Refund checks for Massachusetts residents hitting bank accounts in November

About 3.6 million taxpayers are set to receive cash back this fall after the state government imposed taxes last year that exceeded the legal limit by nearly $3 billion, the state government said on Friday. administration of Governor Charlie Baker.

The plan conflicts with what some Democratic lawmakers expected.

Still, Baker’s team, which oversees the Department of Revenue, said the $2.941 billion that must be returned to taxpayers under a voter-approved law will come in the form of mailed checks or direct deposits, probably from November.

Taxpayers will “automatically” receive their refunds without having to apply. To be eligible, they must have filed a 2021 state tax return by October 17, 2022.

The amount of each refund will be scaled based on how much someone paid in personal income taxes in 2021, with larger checks going to those who paid a greater share of the tax.

Baker’s budget office estimated the refunds will total about 13% of the amount a taxpayer owed Massachusetts in personal income taxes last year, noting that figure could change once it becomes available. will be finalized at the end of October.

“With families facing continued pressure from high prices and inflation, these returns will provide much needed relief,” Baker said in a statement. “Even with nearly $3 billion returning to taxpayers, there remain significant state and federal resources, and we look forward to working with the Legislature to invest this funding in our economy, our communities and our families.”

Bay Staters can use an online calculator launched by the Baker administration to get a projection of what to expect.

Massachusetts has a flat tax rate of 5%, so someone who earned $50,000 in taxable income last year and had a tax liability of $2,500 could qualify for a tax rebate. ‘about $325; towards the top of the scale, a Bay Stater who earned $1 million in taxable income and owed $50,000 in Massachusetts income taxes could qualify for a $6,500 rebate.

However, the final amount of each check will depend on variables such as whether a taxpayer claimed earned income credit, main circuit breaker credit, or dependent credits on their tax return.

Refunds could also be reduced due to refund interceptions for unpaid taxes, unpaid child support or other debts, officials said.

The administration’s implementation plans were rolled out a day after auditor Suzanne Bump certified that Massachusetts collected $2.941 billion more in taxes last year than the cap set by an approved 1986 law. by voters linking tax and wage growth.

“This discount couldn’t come at a better time,” said Massachusetts Retailers Association President Jon Hurst. “Inflation has hurt our consumers and small businesses, and putting those taxes back in taxpayers’ pockets will help with high heating and grocery costs, and inject important consumer dollars back into our local economy. for the holidays.”

Top Democrats in the Legislative Assembly were caught off guard by the emergence this summer of the tax cap, and the news prompted them to vote down a $4 billion economic development bill that included $1 billion in combined one-time and permanent tax breaks.

They have now come to the reality that the Chapter 62F tax relief is due.