The following deductions are available on Massachusetts state tax returns.
Penalty on Early Savings Withdrawal
If you were assessed a penalty due to early withdrawal of savings, and interest on the savings that such a penalty relates to income reported on Line 5a or Line 20 of your MA return or on a prior-year MA return, you can deduct the penalty amount.
You may deduct the total amount (reported on Line 3 of Schedule Y) that you paid to your former spouse during 2020 for alimony paid or for separate maintenance under court decree, or for excess alimony amounts that were recaptured.
NOTE: Alimony payments that are specified as child support may not be deducted.
Amounts Excludible Under MGL Ch. 41, Sec. 111F or U.S. Tax Treaty Included in Form 1, Line 3
The state of Massachusetts allows for an exclusion from income of amounts that were received by a firefighter or police officer incapacitated in the line of duty (per MFL Ch. 41, Sec. 111F), and an exclusion from income of amounts received by qualifying students that are exempt under a United States tax treaty.
For tax years 2022 through 2025, the moving expenses deduction is only available to qualified members of the armed forces. To qualify for the deduction, the following must be true:
- Be active duty
- Moved due to a military order and permanent change of station
- If the individual is a nonresident or part-year resident, have moved to or from MA due to military orders and permanent change of station
Medical Savings Account
Enter the amount of Medical Savings Account deduction included on Form 1040, Schedule 1, Line 23.
Self-Employed Health Insurance
Enter the amount from Form 1040, Schedule 1, Line 17.
Health Savings Account
Enter the amount from Form 1040, Schedule 1, Line 13.
Business Expenses of National Guard and Reserve Members, Performing Artists and Fee-Based Government Officials
Enter the amount from Form 1040, Schedule 1, Line 12.
Student Loan Interest Deduction
Enter the amount from Form 1040, Schedule 1, Line 21; this amount may not exceed $2,500.
NOTE: This deduction is only allowable if you are not claiming the same expenses on Line 12 of Schedule Y, Undergraduate Student Loan Interest Deduction.
College Tuition Deduction
You may claim a deduction for tuition payments paid by you, for yourself, or a dependent, to a qualifying two, or four-year college leading to an undergraduate or associate's degree, diploma or certificate. Any tuition payments for students pursuing a graduate degree at such a college or university are not eligible for the college tuition deduction.
This deduction is equal to the amount by which the tuition payments, minus any scholarships, grants or financial aid received, exceed 25% of your MA AGI amount.
Undergraduate Student Loan Interest Deduction
You may claim a deduction for interest paid on a qualified undergraduate student loan. To be considered eligible for this deduction, the "education debt" must be a loan that is administered by the financial aid office of a two-year or four-year college that you, or a qualified dependent, were enrolled as an undergraduate student.
In addition, the loan must have been acquired through a state or federal student loan program, or via a commercial lender, and must have been spent solely for the purposes of paying tuition and other expenses directly related to school enrollment.
Deductible Amount of Qualified Contributory Pension Income from Another State or Political Subdivision Included in Form 1, Line 4
The state of Massachusetts allows a deduction for contributory pension income received from another state or any of its political subdivisions that do not tax such income from MA, or any of it's political subdivisions.
Claim of Right Deduction
Massachusetts taxpayers who have paid MA personal incomes taxes in a prior year on income attributed to them under a "claim of right" may deduct the amount of that income from their gross income if it later develops that they were not in fact entitled to that income, and have repaid the amounts in question.
NOTE: This deduction is allowed in the year of repayment, provided that the repayment is not considered deductible.
Some examples in which the claim of right may be applied are listed below:
- Stock under claim of ownership
- Employment contracts
- Corporate notes
- Mistake in validity of claim
- Advanced insurance commissions
- Repayment of unemployment compensation and supplemental unemployment benefits in a subsequent year
You may claim a deduction for certain amounts paid for tolls through an E-Z Pass account or for weekly or monthly transit commuter passes for MBTA transit, bus, commuter rail, or commuter boat.
If you are filing as Single, Head of Household, or Married Filing Separately this deduction applies only to the portion that exceeds $150, and the total amount deducted may not exceed $750.
If you are filing as Married Filing Jointly, this deduction applies to the portion expended by each individual that exceeds $150, and the total amount deducted may not exceed $750 for each individual.
Deduction for Expenses of Human Organ Transplant
You may deduct certain expenses and other costs incurred in the process of donating an organ for a human organ transplant to another individual.
You may deduct the following expenses:
- Travel expenses
- Lodging expenses, and
- Lost wages not to exceed $10,000
Certain Gambling Losses
Massachusetts now allows for the deduction of losses from wagering transactions that were incurred at a MA gambling establishment licensed in accordance with MGL Ch. 23K, or a racing meeting licensee or simulcasting licensee, only the extent of the gains from such transactions.
Prepaid Tuition or College Savings Plan Deduction
You may claim a deduction for purchases of, or contributions made to an account in a pre-paid tuition program or a college savings program established by the Commonwealth.
This deduction may not exceed $1,000 for individuals filing as Single, Married Filing Separately, or Head of Household. For individuals filing as Married Filing Jointly, this amount is $2,000.
To enter these deductions within the program, please go to:
- Massachusetts Return
- Certain Gambling Losses
A deduction is allowed for rent paid by the taxpayer during the tax year to a landlord for a principal residence located in Massachusetts. This deduction is limited to 50% of the rent paid and cannot exceed a total deduction of $3,000.
To enter this deduction with in the program, please go to:
- Massachusetts Return
- Rental Deduction
For more information please refer to the instructions for MA Form 1.