Eligible Massachusetts taxpayers will receive checks or direct deposits, likely starting in November, containing their scaled shares of nearly $3 billion in excess state tax revenue, the Baker administration announced Friday.
Announcing a plan that conflicts with what some Democrat lawmakers expected, Gov. Charlie Baker's team said the $2.941 billion that needs to be returned to taxpayers under state law will flow in the form of refunds starting this fall.
Bay Staters will "automatically" receive a mailed check or a direct deposit, with distribution expected to begin in November, the administration said. The amount will vary in proportion to how much personal income tax liability each eligible taxpayer incurred in 2021, with those who faced greater liability receiving larger refunds and vice versa.
"In general, eligible taxpayers will receive a credit in the form of a refund that is approximately 13% of their Massachusetts Tax Year 2021 personal income tax liability," the Executive Office of Administration and Finance wrote in a press release. "This percentage is a preliminary estimate and will be finalized in late October, after all 2021 tax returns are filed."
Taxpayers must have filed a 2021 state tax return by Oct. 17, 2022 to qualify, and any credit they are owed can be reduced through intercepts to cover unpaid taxes, unpaid child support and some other debts.
"While the exceptionally high tax collections we saw in FY22 are a testament to the strength and resilience of the Massachusetts economy, we are pleased to be in a position to return a substantial portion of this revenue back to taxpayers," Administration and Finance Secretary Michael Heffernan said in a statement. "With many feeling the strain of rising prices, these refunds will be a welcome source of relief for more than three million hardworking individuals across the state, and we look forward to executing on the delivery of the refunds in the coming months."
The administration's announcement came one day after Auditor Suzanne Bump certified that Massachusetts collected $2.941 billion more in taxes last year than the allowable amount under a voter-approved 1986 law.
The news could rankle top Democrats in the Legislature, some of whom have said they believe the law requires money to be returned via credits against next year's tax liability or argued the proportional returns will offer the greatest benefits to higher-earning taxpayers.
