Instructions For Form 1 - Massachusetts Resident Income Tax

2006 Form 1 — Line by Line Instructions

12% Income &Tax

Limited Income Credit —

4. Add lines 2 and 3. . . . . . . . . . . . .

Single, Married Filing a Joint Return

5. Enter amount from Form 1,

or Head of Household Only

Line 23. 12% Income from Certain

line 17 . . . . . . . . . . . . . . . . . . . . . . .

If you do not qualify for No Tax Status, but you are

6. Subtract line 5 from line 4. If “0” or less,

Capital Gains

single and your Massachusetts AGI is between

you do not qualify for this exemption.

If you have any interest income other than interest

$8,000 and $14,000, or if you are filing as head of

Omit remainder of worksheet . . . . .

from deposits in banks located in Massachusetts,

household and your Massachusetts AGI is be-

7. Excess exemptions applied against interest

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

tween $13,550 and $23,713 plus $1,750 per de-

and dividend income and 12% income. If line 1

ital gains or losses, or any adjustments to interest

pendent, or if you are married filing a joint return

is larger than line 6, enter line 6 here and in

income (other than interest from Massachusetts

and your Massachusetts AGI is between $15,300

Schedule B, line 36. If line 6 is equal to or

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

larger than line 1, enter line 1 here and in

and $26,775 plus $1,750 per dependent, you may

enclose Massachusetts Schedule B. To determine

Schedule B, line 36. Complete lines 8

qualify for the Limited Income Credit. This credit

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

through 10. . . . . . . . . . . . . . . . . . . .

is an alternative tax calculation that can result in a

ule B instructions in this booklet.

8. Subtract line 7 from line 6. If “0,” omit

significant tax reduction for people whose income

remainder of worksheet . . . . . . . . .

is close to the No Tax Status threshold.

Enter in line 23a the amount from Schedule B, line

9. Enter Schedule D, line 18. Not less

39. Multiply this amount by .12 (12%) and enter

than “0” . . . . . . . . . . . . . . . . . . . . . .

Massachusetts AGI

the tax in line 23.

10. Excess exemptions applied against

Massachusetts AGI is not the same as taxable in-

long-term capital gain income. If line 9 is

come. Massachusetts AGI includes:

Tax on Long-Term

larger than line 8, enter line 8 here and in

◗ wages, salaries, tips;

Schedule D, line 19. If line 8 is equal to or

◗ taxable pensions and annuities;

Capital Gains

larger than line 9, enter line 9 here and in

◗ pension income from another state or political

Schedule D, line 19 . . . . . . . . . . . . .

subdivision before any deduction;

Line 24. Schedule D

◗ taxable IRA/Keogh and Roth IRA distributions;

(Long-Term

Excess Exemptions

◗ fees and unemployment compensation;

Capital Gains and Losses Excluding

If excess exemptions were used in calculating lines

◗ income or loss from a business or profession;

Collectibles)

20, 23 or 24 (see Schedule B, line 36 and/or Sched-

◗ income or loss from partnerships, S corpora-

Enter in line 24 the amount from Schedule D, line

ule D, line 19), be sure to fill in the oval in line 24.

tions and trusts;

21, but not less than “0.” To determine if you need

◗ rents, royalties and REMIC income;

Line 25. Credit Recapture Amount

to file Schedule D, refer to the Schedule D instruc-

◗ alimony and other 5.3% income;

tions in this booklet.

If any Brownfields Credit (BC), Economic Opportu-

◗ interest from Massachusetts banks before ex-

nity Area Credit (EOA), Low Income Housing Credit

emptions; and

Schedule B, Line 36 and Schedule D, Line 19

(LIH) or Historic Rehabilitation Credit (HR) prop-

◗ other interest, dividends, and capital gains.

Worksheet — Exemptions from Interest

erty is disposed of or ceases to be in qualified use

and Dividend Income, 12% Income and Long-

prior to the end of its useful life, the difference be-

Complete the Massachusetts AGI Worksheet to see

Term Capital Gain Income and Excess Home

tween the credit taken and the total credit allowed

if you may qualify for the College Tuition Deduction

Heating Fuel Deduction (Only if Single, Head

for actual use must be added back to your tax on

(Schedule Y, line 11), No Tax Status or the Limited

of Household, or Married Filing Jointly)

Form 1. Complete and enclose Schedule H-2,

Income Credit.

If your total exemptions in line 18 are more than

Credit Recapture. Schedule H-2 is available at

Massachusetts AGI Worksheet

the amount of your 5.3% income after deduc-

or by calling (617) 887-MDOR

tions in line 17 or your home heating fuel de-

or toll-free in Massachusetts 1-800-392-6089.

1. Enter your total 5.3% income from Form 1,

duction from Schedule Y, line 14 is more than

line 10. Not less than “0” * . . . . . . .

the amount of 5.3% income after deductions

Massachusetts

2. Enter the total of Schedule Y, lines 1

from Schedule Y, Line 14 Worksheet, line 3, the

through 10 . . . . . . . . . . . . . . . . . . . .

excess may be applied against all your interest

3. Subtract line 2 from line 1. Not less

Adjusted Gross

and dividend income and income taxed at 12%.

than “0” . . . . . . . . . . . . . . . . . . . . . .

Any remaining excess amount may then be

4. Enter total Massachusetts bank interest or the

Income (AGI)

applied against all your long-term capital gain

interest exemption amount, whichever is smaller,

income. Complete the following worksheet only

from Form 1, line 5a or

if line 17 is less than line 18 to determine if you

No Tax Status — Single, Married Filing a

line 5b . . . . . . . . . . . . . . . . . . . . . . .

qualify for the excess exemption and the Sched-

Joint Return or Head of Household Only

Note: If Form 1, line 10 is a loss, do not complete

ule Y, Line 14 Worksheet on page 20 to deter-

If your Massachusetts AGI was $8,000 or less if

line 4 above. Instead, combine Form 1, line 10

mine if you qualify for the excess deduction.

single, $13,550 or less plus $1,000 per depen-

with the smaller amount of total Massachusetts

Enter all losses as “0.”

dent if head of household, or $15,300 or less plus

bank interest or the interest exemption amount.

1. Enter amount from Schedule B, line 35.

$1,000 per dependent if married filing a joint re-

Enter the result in line 4 above, unless the result

Not less than “0” . . . . . . . . . . . . . . .

turn, you qualify for No Tax Status and are not re-

is a loss. If the result is a loss, enter “0.”

2. Enter amount from Form 1,

quired to pay any Massachusetts income taxes.

5. Enter amount from Schedule B, line 35. If

line 18 . . . . . . . . . . . . . . . . . . . . . . .

there is no entry in Schedule B, line 35 or if

3. Enter the amount from line 14 of

not filing Schedule B, enter the amount from

the Schedule Y, line 14 worksheet

Form 1, line 20 . . . . . . . . . . . . . . . .

continues on next page …

Instructions For Form 1 - Massachusetts Resident Income Tax - 2006 Page 13

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