Instructions For Form 1 - Massachusetts Resident Income Tax

2006 Form 1 — Line by Line Instructions

Note: Same-sex joint filers should complete a pro

Line 14. 50% Rental Deduction

Line 15. Other Deductions (from

forma U.S. Form 2441 or U.S. Form 1040A,

Schedule Y)

You may be entitled to a rental deduction equal to

Schedule 2. In addition to changing the maximum

one-half (50%) of the rent you paid during 2006

Enter the total from Schedule Y, line 17. Be sure to

amount of the deduction allowed on U.S. Form

(up to a maximum of $3,000 per return) for your

enclose Schedule Y with your return. Failure to do

2441 or U.S. Form 1040A, Schedule 2 (see pre-

principal residence in Massachusetts. Enter the

so will delay the processing of your return.

ceding paragraph), same-sex spouses should pre-

total amount of qualified rent paid by you during

pare the pro forma federal forms as though they

Line 17. 5.3% Income After

2006 in line 14a. Divide line 14a by 2 and enter the

were filing a joint federal return. See TIR 04-17

result, or $3,000 ($1,500 if married filing a sepa-

Deductions

for more information.

rate return) — whichever is smaller — in line 14.

Subtract line 16 from line 10. Enter the result in line

17. If line 16 exceeds line 10, enter “0” in line 17.

Note: This deduction amount does not apply to

Line 12 Worksheet — Child Under 13 or

your U.S. tax return.

Disabled Dependent/Spouse Care Deduction

Line 19. 5.3% Income After

What Qualifies for the Rental Deduction?

Use this worksheet to calculate your Mass-

Exemptions

achusetts child under age 13 or disabled

The deduction must be for rent you paid to a land-

Subtract line 18 from line 17. If line 18 exceeds

dependent/spouse care deduction.

lord for the rental or lease of your principal resi-

line 17, enter “0” in line 19.

dence in Massachusetts.

1. Enter the amount of qualified expenses

If line 18 exceeds line 17 and you received interest

you incurred and paid in 2006 for a qualifying

If two or more persons jointly rent a unit, each oc-

income (other than interest from Massachusetts

person(s). This amount may exceed the federal

cupant using it as his/her principal residence is en-

banks), dividends or capital gain income, com-

limit of $3,000 for one qualifying person or

titled to a deduction based on the amount of rent

plete the worksheet for Schedule B, line 36 and

$6,000 for two or more persons. However,

that each person paid.

Schedule D, line 19, if applicable. All others pro-

do not enter more than $4,800 for one

If the rent is paid by a third party (such as a parent)

ceed to line 20.

qualifying person or $9,600 for two or

who maintains a principal residence elsewhere, no

more persons . . . . . . . . . . . . . . . . .

Line 20. Interest and Dividend

50% rental deduction is allowed for either party.

2. Enter the amount from U.S. Form 2441,

Income

line 4, or U.S. Form 1040A, Schedule 2,

A principal residence does not include any resi-

line 4 . . . . . . . . . . . . . . . . . . . . . . . .

If you have any interest income other than interest

dence for vacation, an apartment for a person on

3. Enter the amount from U.S. Form 2441,

from deposits in banks located in Massachusetts,

a temporary assignment or a student or faculty

line 5, or U.S. Form 1040A, Schedule 2,

dividend income in excess of $1,500, certain cap-

member who has a principal residence elsewhere.

line 5 . . . . . . . . . . . . . . . . . . . . . . . .

ital gains or losses, or any adjustments to interest

It also does not include any apartment or house

4. Enter the smallest of line 1, 2 or 3

income (other than interest from Massachusetts

in Massachusetts of a nonresident who has a

5. If you paid 2005 expenses in 2006, enter the

banks), you must complete Schedule B. Be sure to

legal residence in another state or country.

amount of the allowed 2005 expenses used to

enclose Massachusetts Schedule B. To determine

compute the credit on U.S. Form 2441, line 9,

Payment for occupying a hotel, motel or rooming

if you need to file Schedule B, refer to the Sched-

or U.S. Form 1040A, Schedule 2, line 9.

house is not considered rent unless a rental agree-

ule B instructions in this booklet.

Otherwise, enter “0” . . . . . . . . . . . .

ment exists. All separately stated charges such as

Enter in line 20 the amount from Schedule B, line

6. Add lines 4 and 5. Enter here and in Form 1,

utilities, furnishings or parking cannot be included

38. If not required to file Schedule B, enter divi-

line 12 . . . . . . . . . . . . . . . . . . . . . . .

in rent for purposes of this deduction. Also, rent

dend income of $1,500 or less (from U.S. Form

does not include any advance payments (such as

Note: If you choose to take a deduction in line

1040 or 1040A, line 9a) in line 20.

security deposit, last month’s rent, etc.) until ac-

12, you cannot take the deduction in line 13.

tually applied as rent.

Tax on 5.3% Income

Line 13. Dependent Member(s)

How Do I Calculate My Rental Deduction

of Household Under Age 12,

If I Am Married Filing Separately?

Line 22. 5.3% Tax

(from Tax Table)

or Dependents Age 65 or Over

If a husband and wife file separate returns, they are

Based upon the amount in line 21, find the proper

as of

each entitled to a rental deduction equal to 50% of

(not you or your spouse)

amount of tax in the blue table at the back of this

the rent each pays, not to exceed $1,500 per re-

December 31, 2006, or Disabled

booklet. Enter the tax in line 22. If line 21 is more

turn. However, a married couple filing separately

Dependent

than $24,000, multiply the amount in line 21 by

may allocate the rent deduction differently, pro-

You may deduct $3,600 for a dependent member of

.053 and enter the result in line 22. You must use

vided the amount taken by each spouse does not

household, or $7,200 for two or more dependents,

the tax table if line 21 is $24,000 or less.

exceed 50% of the rent actually paid by that

under age 12, or dependent age 65 or over (not

spouse, and provided their combined rental deduc-

Note: Personal income tax forms must provide an

you or your spouse) as of December 31, 2006, or

tions do not exceed $3,000. If the allocation re-

election to voluntarily pay tax at a rate of 5.85% on

disabled dependent. Enter the number of qualified

sults in one spouse claiming a deduction in excess

taxable income which would otherwise be taxed

dependents in line 13a, not to exceed two, and mul-

of $1,500, that spouse must enclose with his/her

at a rate of 5.3%. The election to pay tax at the rate

tiply that amount by $3,600. Enter the result in line

return a statement signed by the other spouse in-

of 5.85% does not apply to items of income taxed

13. Only if single, head of household or married fil-

dicating consent to the allocation. The statement

at 12% (short-term capital gains and gains on col-

ing jointly. You cannot claim this deduction if mar-

must contain the name, address and Social Secu-

lectibles). If choosing the optional 5.85% tax rate,

ried filing a separate return.

rity number of the consenting spouse and the

multiply line 21 and Schedule D, line 20 by .0585

Note: You may claim an amount in line 13 only if

amount of rental deduction taken by that spouse.

and fill in the oval.

there is no entry in line 12.

Instructions For Form 1 - Massachusetts Resident Income Tax - 2006 Page 12

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