Massachusetts has made the following changes to the tax laws for the 2018 tax year:
- Massachusetts has done an annual update on the income thresholds for the Senior Circuit Breaker Tax Credit. Your total income cannot exceed $58,000 for single filers ($57,000 in 2017), $73,000 for a head of household filer ($72,000 for 2017) and $88,000 for joint filers ($86,000 for 2017).
- The monthly exclusion amounts have changed for Employer-Provided Parking to $260 and for Transit Pass, and Commuter Highway Vehicle Benefits to $135 for the 2018 tax year.
- The State has agreed with the Internal Revenue Code that the Sinai Peninsula of Egypt is now treated as a combat zone. Compensation received by military personal for services performed in these combat zones may exclude this income to the extent it was excluded on the federal return.
Additions to Income
- U.S. Individual shareholders of a controlled foreign corporation will now have to include their pro rata share of GILTI in their federal gross income each year.
Deductions and Expenses
- MA no longer allows 50% of the entertainment expenses as a deduction for businesses as it has adopted the new federal change under the TCJA.
- The State has adopted the change to no longer allow miscellaneous itemized deductions that are subject to the 2% AGI limitation. The State allows certain depreciable property such as sports utility vehicles and real property to be deducted as a trade or business expense.
- Travel, lodging and meals while away from home or expenses in connection with services performed as an employee.
- Expenses that are related to the trade or business carried on by the taxpayer while being performed as an employee.
- The State allows certain depreciable property such as sports utility vehicles and real property to be deducted as a trade or business expense.
- The State has now limited the net business interest deduction given in a taxable year to 30%.
- The deduction for gambling losses has been limited to the amount of winnings.
- MA has adopted the change for the medical expenses threshold from 10% to 7.5% under the TCJA.
- The limitations for contributions from compensation of individuals with disabilities has been increased.
- You may now use 529 plan funds for elementary and secondary school expenses up to $10,000 per year,
For more details on these changes, please click here.