Instructions For Form 1 - Massachusetts Resident Income Tax

2006 Form 1 — Schedule Instructions

Senior Circuit

Is the Tax Credit Considered Income?

not otherwise included in the taxpayer’s Massachu-

setts AGI, and gross receipts (for example, the re-

Tax credits received by eligible taxpayers are not

turn of capital or gifts) from any other source

Breaker Tax Credit

considered income for the purpose of obtaining

except the tax credit itself. The exemptions allowed

eligibility or benefits under other means-tested as-

which decrease the total income amount are those

sistance programs including food, medical, hous-

What Is It?

allowed for blindness, dependents and taxpayers

ing, energy and educational assistance programs.

For tax years beginning on or after January 1,

who are at least age 65 by the end of the tax year.

2001, senior citizens in Massachusetts may be el-

How Does a Taxpayer Claim

Line 4. Total Social Security

igible to claim a refundable credit on their state

the Credit?

income taxes for the real estate taxes they paid on

Benefits Received

Taxpayers who are eligible for the tax credit in the

the Massachusetts residential property they own

Enter in line 4 the amount of Social Security benefits

2006 tax year can claim the credit by submitting a

or rent and which they occupy as their principal

received in 2006. Social Security benefits include

completed Schedule CB, Circuit Breaker Credit,

residence. The maximum credit allowed is $870 for

retirement, disability, dependent and survivorship.

with their 2006 state income tax return. Eligible

the tax year beginning January 1, 2006. See TIR

taxpayers who do not normally file a state income

Line 5. Pension, Annuities,

06-17 for more information.

tax return may obtain a refund by filing a return

IRA/Keogh Distributions Not Taxed

Eligible taxpayers who own their property may

with Schedule CB. As with all claimed tax credits

on Your Massachusetts Tax Return

claim a credit equal to the amount by which their

and deductions, the taxpayer must keep all perti-

property tax payments in tax year 2006 (exclud-

nent records, receipts and other documentation

Enter in line 5 the amount of pension, annuities,

ing any exemptions and/or abatements), includ-

supporting his or her claim for the credit.

IRA/Keogh distributions not taxed on your Mass-

ing water and sewer debt charges, exceed 10% of

achusetts Form 1. See Form 1, line 4 instructions,

Line 1. Living Quarters Status

their “total income” for the same current tax year.

Pension and Annuities, for a list of exempt items

During 2006

Taxpayers residing in communities that do not in-

that must be included in Schedule CB, line 5 as part

clude water and sewer debt service in their prop-

of total income for the purposes of calculating the

Be sure to fill in the appropriate oval. If you were a

erty tax assessments may claim, in addition to

Circuit Breaker Credit.

renter in 2006 and you received any federal and/or

their property tax payments, 50% of the water

state subsidy, or you rent from a tax-exempt entity,

Line 6. Misellaneous Income

and sewer use charges actually paid during the

you do not qualify for the Circuit Breaker Credit.

tax year when figuring their credit.

Including Cash Public Assistance

Line 2. Assessed Value of Principal

Enter the amount of miscellaneous income, includ-

Renters may claim a credit in the amount by which

Residence as of January 1, 2006

ing cash public assistance, received during 2006.

25% of their annual rental payment is more than

Enter the amount of the assessed value of your

This includes but is not limited to food stamps and

10% of their total income.

principal residence as of January 1, 2006. If you

welfare payments, disability income, gifts, sick pay

For purposes of the tax credit, a taxpayer’s “total

own a multi-family home, mixed-use property, or

and worker’s compensation.

income” includes taxable income as well as ex-

more than one acre of land, only the assessed value

empt income such as Social Security, Treasury

Line 12. Qualifying Income

of the principal residence, together with the land

bills and public pensions. For a complete list of

Subtract line 11 from line 7. You do not qualify for

that immediately surrounds and is associated with

what constitutes “total income,” see TIR 01-19.

the Circuit Breaker Credit if you are filing as “Single”

that residence, not to exceed one acre, should be

and line 12 is greater than $46,000; or if you are

used. If the assessed value is over $684,000, you

Who Is Eligible for the Credit?

filing as “Head of household” and line 12 is greater

do not qualify for the credit. Contact your local

To be eligible for the credit for the 2006 tax year, a

than $58,000; or if you are filing as “Married filing

city or town’s assessors’ office if you have any

taxpayer must be 65 years of age or older before

jointly” and line 12 is greater than $70,000.

questions in determining the amount of the as-

January 1, 2007 (for joint filers, it is sufficient if

sessed value of your principal residence as of

one taxpayer is 65 years of age or older), must

Credit Calculation

January 1, 2006.

own or rent residential property in Massachusetts

If you filled in the “Homeowner” oval in line 1,

and occupy the property as his or her principal res-

Income Calculation

complete lines 13 through 20, if you filled in the

idence, and must not be the dependent of another

“Renter” oval in line 1, go to line 21.

Qualifying income for the Circuit Breaker Credit

taxpayer. The taxpayer’s total income cannot ex-

(Schedule CB, lines 3 through 12) is the taxpayer’s

ceed $46,000 for a single filer who is not the head

Line 13. Real Estate Taxes Paid

Massachusetts AGI as defined in MGL Ch. 62,

of a household, $58,000 for a head of household,

in Calendar Year 2006 for Your

sec. 2 increased by various amounts that may have

or $70,000 for taxpayers filing jointly. No credit is

Principal Residence

been excluded or subtracted when originally calcu-

allowed for a married taxpayer unless a joint re-

lating the taxpayer’s Massachusetts AGI, less cer-

Enter the amount of real estate taxes paid in calen-

turn is filed. Moreover, the assessed valuation of

tain exemptions claimed by the taxpayer. Amounts

dar year 2006. Be sure to include real estate tax

the real estate cannot exceed $684,000.

added back to Massachusetts AGI in computing

payments made pursuant to the Community Pres-

No credit is allowed if the taxpayer claims the

qualifying income include income from Social Se-

ervation Act, the Cape Cod Open Space Land Acqui-

“married filing separate” status, receives a federal

curity, retirement, pension or annuities, cash pub-

sition Program and/or paid to a tax-levying district.

or state rent subsidy, rents from a tax-exempt en-

lic assistance, tax-exempt interest and dividends,

tity, or is the dependent of another taxpayer.

net capital losses, long-term capital losses, certain

capital gains, income from a partnership or trust

Instructions For Form 1 - Massachusetts Resident Income Tax - 2006 Page 30

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