Senior State Income Tax

Senior citizens in Massachusetts may be eligible to claim a refundable credit on their State Income Taxes for the real estate taxes paid on the Massachusetts residential property they own or rent which they occupy as their principal residence.

The maximum credit allowed is $1,030. For the tax year beginning January 1, 2013. If the credit due the taxpayer exceeds the amount of the total income tax payable for the year, the excess amount of the credit will be refunded to the taxpayer without interest.

Eligible taxpayers who own their property may claim a credit equal to the amount by which their property tax payments in the current tax year, (excluding any exemptions and/or abatement) including water and sewer debt charges, exceeds 10% of their “total income” for the same current tax year.

Taxpayers residing in communities that do not include water and sewer debt service in their property tax assessments may claim, in addition to their property tax payments, 50% of the water and sewer charges actually paid during the tax year when figuring the credit.

For renters, the law assumes that 25% of their rent goes toward property tax. Accordingly, renters may claim a credit in the amount by which 25% of their annual rental payment is more than 10% of their total income.

Income Requirements
For purposes of the tax credit, a taxpayer’s total income includes taxable income as well as exempt income such as social security, treasury bills and public pensions. Actual tax payments made are reduced by any abatements or exemptions received, monies earned through the Senior Work programs or penalty and interest charges due to delinquent payments.

To be eligible for the credit:
  • A taxpayer must be 65 years of age or older before January 1.
  • A taxpayer must own or rent residential property in Massachusetts and occupy the property as his/her principal residence (domicile).
  • The taxpayer’s total income cannot exceed $55,000 for a single filer who is not the head of a household, $69,000 for a head of household, or $82,000 for taxpayers filing jointly. 
  • No credit is allowed for a married taxpayer unless a joint return is filed. 
  • The assessed valuation of the real estate cannot exceed $700,000.
  • No credit is allowed if the taxpayer claims the married filing separate status, receives a federal or state rent subsidy, rents from a tax-exempt entity or is the dependent of another taxpayer.