Summary of Bill S 1957: An Act Supporting Families Through Enhanced Tax Credits

Purpose and Intent

Bill S 1957 aims to enhance tax credits for families in Massachusetts, thereby providing additional financial support to low- and moderate-income households. The legislation seeks to increase the Earned Income Tax Credit (EITC) and introduce measures that make tax credits more accessible to a broader range of taxpayers, including those without Social Security Numbers.

Key Provisions

The bill includes several significant amendments to Chapter 62 of the General Laws:

1. Increase in EITC Percentage:

   • The percentage of the federal EITC that Massachusetts taxpayers can claim will increase from 40% to 50%.

2. Eligibility for Tax Credits:

   • Taxpayers may claim credits using either a Social Security Number or an Individual Taxpayer Identification Number (ITIN). This change aims to include taxpayers who are otherwise ineligible due to lack of a Social Security Number.
   • For taxpayers with more than three qualifying children, the percentage of the federal credit will increase by 5 percentage points for each additional child.

3. Household Maintenance Definition:

   • The definition of "maintains a household" will align with federal definitions, allowing for a credit of $600 for each qualifying dependent or individual.

4. Advance Payments:

   • The Department of Revenue (DOR) may establish a process for taxpayers to receive advance payments of the credit, based on estimated eligibility for the taxable year.

5. Outreach and Information Dissemination:

   • The DOR will be required to provide multilingual information about tax credits and free tax preparation services, ensuring that all eligible families are aware of the benefits available to them.

6. Implementation Timeline:

   • The provisions of this act will apply to tax years beginning on or after January 1, 2025.

Affected Parties

• Families and Individuals: The bill primarily benefits low- and moderate-income families, particularly those with children, by increasing their tax credits.
• Taxpayers without Social Security Numbers: This legislation expands access to tax credits for individuals who may not have a Social Security Number but are otherwise eligible.
• Department of Revenue: The DOR will have new responsibilities for outreach and processing advance payments.

Procedural Aspects

• Introduced: February 27, 2025
• Hearing Rescheduled: The hearing for this bill has been rescheduled to September 16, 2025, from 10:30 AM to 12:30 PM.
• Legislative Actions: The bill has been referred to the committee on Revenue and has received concurrence from the House.

Conclusion

Bill S 1957 represents a significant step towards enhancing financial support for families in Massachusetts through improved tax credits. By increasing the EITC and expanding eligibility, the bill aims to alleviate poverty and support economic stability for vulnerable populations. The upcoming hearing will provide an opportunity for further discussion and input on this important legislation.