On June 8th, the Committee on Senate Ways & Means unveiled its proposal for a Tax relief bill S.2397 An Act to improve the Commonwealth’s competitiveness, affordability, and equity. This bill includes raising the state’s Low-Income Housing Tax Credit (LIHTC) program authorization by $20 million for a total annual allocation of $60 million.
The Massachusetts LIHTC awards tax credits to investors in affordable multifamily rental projects. It encourages private investment in affordable housing and allows developers to finance part of the cost of the development with equity invested by local corporations and individuals to help keep rents low. LIHTC is a critical resource in many affordable housing projects across Massachusetts. Here is the full summary of the Senate Ways & Means proposal of the bill.
The Legislature has appointed a Conference Committee to reconcile the differences between the two versions of the bill:
- Rep. Aaron Michlewitz, aaron.michlewitz@mahouse.gov, 617-722-2470
- Rep. Mark Cusack, Mark.Cusack@mahouse.gov, (617) 722-2320
- Rep. Michael Soter, michael.soter@mahouse.gov, (617) 722-2305
- Sen. Michael Rodrigues, Michael.Rodrigues@masenate.gov, (617) 722-1114
- Sen. Susan Moran, susan.moran@masenate.gov, (617) 722-1330
- Sen. Bruce Tarr, Bruce.Tarr@masenate.gov, (617) 722-1600
The Tax bill also includes the following tax changes:
- Extension of Brownfields Redevelopment Tax Credit to 2028
- Increase to the availability and size of grants/ loans from the Brownfields Redevelopment Fund
- Exclusion of grant/ loan from the Brownfields Redevelopment Fund that has not been repaid from net response and removal costs
- Increase in Housing Development Incentive Program (HDIP) tax credit annual cap from the current $10 million to $30 million for 2024 and beyond
- Increases HDIP annual cap to $57 million only for the calendar year 2023
- Increase in Rental Deduction cap from $3,000 to $4,000
- Increase in the Earned Income Tax Credit (EITC) from 30% to 40%
- Increase in Child & Dependant Tax Credit (CITC) from $180 to $310 per child/ dependant and removes cap on number of eligible children/ dependants
- Increase tax credit for full lead paint abatement to $3,000 and $1,000 for a partial abatement
- Increase in maximum available Title V septic tax credit from $6,000 to $18,000 and increase in the amount claimable per year from $1,500 to $4,000
- Increase in the senior circuit breaker tax credit cap from $750 to $1,500
- Allow municipalities to adopt local property tax exemption for real estate rented by a person with income less than 130% AMI
- Exemption of estates valued under $2 million from estate tax and eliminate tax cliff by establishing uniform credit of $99,600 for all estates subject to estate tax.
The House version of the Tax bill did not include HDIP or LIHTC provisions.