Stimulus 2022: Massachusetts’ propose tax refund payments worth up to $20,000

October 16, 2022 Aakash Ghosh Stimulus Check 0

Stimulus 2022: Massachusetts' propose tax refund payments worth up to $20,000

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As the current Chapter 62F law stands, the top earners in Massachusetts can collect refunds exceeding $20,000, while 20 percent of taxpayers will grab an average credit of $9.

MASSACHUSETTS lawmakers proposed changing its current tax structure where residents would receive a maximum credit of $6,500 per taxpayer.

Chapter 62F offers a windfall of cash to the state’s top-income earners, while lower-income workers receive a much smaller amount.

Stimulus 2022: Massachusetts' propose tax refund payments worth up to $20,000

The proposed law, led by Representative Michael Connolly, would redistribute the remainder of the $2.9billion and designate an extra $200 to about a  3.5million state residents.

“We took action to authorize the advance refund checks, and we did so in a way that returns the entire $2.9billion and delivers a bigger refund to 99.4 percent of eligible taxpayers,” Mr. Connolly said in a press release.

The lawmakers filed the proposed legislation as housing, childcare, healthcare, food, energy, fuel, and heating costs continued to rise.

What is the current law?

According to the proposed legislation, Chapter 62F is a tax cap to prevent excessive tax hikes.

Nearly 26 percent of the $2.9billion excess will be given to taxpayers who earned over $ 1 million in income in 2021.

Taxpayers with incomes of $ 1 million or more will get refunds of about $22,000 on average.

While taxpayers in the bottom 20 percent of incomes will receive refunds of about $9 on average.

Chapter 62F is based on a revenue-growth limit set by wage and salary information.

The lawmakers claim this doesn’t consider capital gains and non-withheld income as top earners grab most of their income from capital gains.

Middle to lower-income folks sees most of their income in wages and salaries.

“This results in a revenue limit that doesn’t account for how wealthy people make a lot of their money,” according to the press release.

Other states and their tax rate

Missouri Governor Michael L. Parson has signed legislation dropping the state income tax rate.

Starting January 1, 2023, the tax rate will drop from 10.25 percent to 4.95 percent.

The Missouri governor said in a press conference, “while Washington D.C. politicians ignore record inflation and skyrocketing consumer prices, we won’t make the same mistake here in the state of Missouri.”

The law reduces the top individual income tax rate from 5.2 to 4.95 percent, where most taxpayers will see a roughly five percent decrease in their tax liability.

Additionally, this will eliminate the bottom income tax bracket and allow residents to earn their first $1,000 tax-free.

Residents may see the tax rate drop to 4.8 percent as soon as 2024, but only if state tax revenue increases by at least $175million over a specific period.

The new law also permits three additional annual tax cuts that may lower the tax rate to 4.5 percent.

Reduce the top individual income tax rate from 5.2 to 4.95 percent, where most taxpayers will see a roughly five percent decrease in their tax liability.

Additionally, this will eliminate the bottom income tax bracket and allow residents to earn their first $1,000 tax-free.

Residents may see the tax rate drop to 4.8 percent as soon as 2024, but only if state tax revenue increases by at least $175million over a specific period.

Plus, a tax expert shares the moves to make before the end of 2022, including preparing for direct payments worth up to $1,000s.

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About Aakash Ghosh 475 Articles
Akash Ghosh is a cricket enthusiast and a writer who covers the latest news and match previews for Panasiabiz. He has been following the game since he was a kid and enjoys analyzing the performances of players and teams. He also likes to share his opinions and predictions with fellow cricket fans through his articles and social media posts. Akash has a degree in journalism and a passion for writing engaging and informative content. Akash can be reached at [email protected]