Mass expecting to follow any of Federal changes?

[Colmatt]

Any idea if MA is going to accept some of the latest unemployment and PPP Federal changes?  They have pending legislation I hear on the forgiven PPP exclusion, but nothing on either really.  Anyone in the know?

[Brother Jack · Accepted solution]

I am watching it myself. I got a notice from MA Society of EA's the other day with this news item. This bill was co-sponsored by most MA senators and the PPP forgiveness is expected to pass. Not sure the status of the unemployment follow Federal suit but there's hints it may be addressed.  Advice is to hold off filing until we find out either way.

Senator Eric Lesser, Senate Committee On Ways and Means Thanks MaSEA A short but sweet thank you was sent from Senator Lesser to MaSEA and Mason Klinck in particular for helping to push for the state legislation changing the taxation of forgiven PPP loans. Mason, John Warren, and others in MaSEA pushed the state to treat the forgiven PPP loans as the federal government is doing, that is, treat the forgiveness as tax-exempt income.  "Belated thank you, Mason. I'm happy to report that this bill will be rolled into a larger piece of legislation and should be headed to the Governor's desk soon," Lesser. If passed, SD 172 will make this change to PPP treatment and also reduce taxation of unemployment. It is currently working its way through the statehouse. The high number of legislators now supporting the bill are raising hopes that it will pass. We await the news. It is worth considering putting MA partnerships and MA S-corps returns with 2020 forgiveness of PPP loans on extension. It is worth considering putting all returns with unemployment where the AGI is below $150,000 on hold for a few weeks while we await the federal bills passing and learn more about the state bill. (Please note:  It is possible that the state bill will change to better align the unemployment treatment given the federal bill, although not certain.)

[TAXOH]

Someone posted this the other day

State Conformity to ARP & Unemployment Compensation (drakesoftware.com)

[Colmatt]

Thank you very much

[Kate1]

FYI - As a result of a recent state law change, taxpayers with household income not more than 200% of the federal poverty level may deduct up to $10,200 of unemployment benefits from their taxable income on their 2020 and 2021 tax returns for each eligible individual. Federal law allows a deduction of up to $10,200 if the taxpayer’s federal adjusted gross income is less than $150,000. Since the Massachusetts income threshold is different from the federal income threshold, some taxpayers may be eligible for a deduction on their federal tax return but not on their Massachusetts tax return.  

Further info on the MA website indicates if you have already filed and not taken advantage of this deduction they caution you not to amend at this time. It sounds as if they are going to reach out directly to these individuals YAY! for us.

In ProSeries the deduction is taken on Schedule Y Line 9

Kathy

[Colmatt]

Thank you very much.

[Brother Jack]

The Mass DOR has yet to define what constitutes "Household Income". They mention in the proposed law before it was signed using Federal Guidelines. They even put household income in quotations. Does a dependent child use the quideline? Is child support received household income? Does a parent include dependents wages as part of household income?  There are too many unanswered questions at this time. I'm still on hold with these returns waiting more clarification.At least we know how to handle the subtraction when these issues are clarified.

[Colmatt]

Just amazing, I'm holding them to let the dust settle too.  Thanks for the clarification.