Find Out What New MA $1 Billion Tax Relief Deal Might Do For You

BOSTON, MA — Lawmakers on Beacon Hill Tuesday filed a long-awaited tax relief package, which is projected to save taxpayers about $1 billion in the coming years.

But the package, which took about two years to put together, isn't going to mean savings for everyone. The package contains specific carveouts for groups of taxpayers, and some of the biggest winners include property developers and residents who own estates worth millions.

Here's a look at the key pieces of the bill and what they might mean for you:

Developer tax break rises

The state's Housing Development Incentive Program will be expanded to offer $57 million in tax incentives in the first year of the package to clear a backlog of requests from developers. The HDIP credit reimburses developers who build market rate housing in gateway cities, but it doesn't require units to be affordable — and many HDIP developments end up being very expensive. The credit would fall to $30 million in the second year of the package and stay there, an increase over the $10 million per year the state offers in HDIP credits currently.

Estate tax break

The package increases the estate tax threshold from $1 million to $2 million. The package also changes the law so estates are taxed at the limit above $2 million, not on the entire value. So an estate worth $3 million would only be taxed on the $1 million over the threshold.

Earned income tax credit

The package boosts the earned income tax credit for low-income people from 30 to 40 percent of the federal credit.

New child tax credit

When the package goes into effect, guardians will be able to claim a new $310 credit per dependent, and that rises to $440 in the second year of implementation. Gov. Maura Healey had wanted the credit to be as high as $600 per dependent.

Capital gains rate

The state's short-term — investments younger than one year — capital gains tax rate will be reduced from 12 to 8-1/2 percent.

62F change

This is the obscure law that sends refunds to some taxpayers if the state collects more revenue in a given fiscal year than the sum of all wages and salaries. The package would change 62F so all refunds are equal among taxpayers rather than based on income tax payments.

Rental tax credit

Seniors who either rent or own homes will see their tax credit cap rise from $1,200 to $2,400, and other renters will see the tax credit cap rise from $3,000 to $4,000.

Lawmakers are expected to vote on the package Wednesday and Thursday, with a signature by Gov Maura Healey to follow. If she signs, the package is estimated to save taxpayers nearly $600 billion through the end of the fiscal year on June 30.