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2006 Form 1-NR/PY Instructions — Before You Begin

Joint Filers. No tax is imposed if the Massachu-

Home Energy Efficiency Tax Credit

net response and removal costs incurred by a tax-

setts adjusted gross income (AGI) does not exceed

payer between August 1, 1998 and August 5,

Recent legislation provides the owner of residential

$15,300 plus $1,000 per dependent. Joint filers are

2005, were eligible for the credit provided that the

property located in Massachusetts a credit for cer-

eligible for the Limited Income Credit if Massachu-

taxpayer commenced and diligently pursued an en-

tain energy efficient heating items purchased be-

setts AGI does not exceed $26,775 plus $1,750 per

vironmental response action before August 5,

tween November 1, 2005 and March 31, 2006 for

dependent.

2005. As a result of the recent legislation, the envi-

installation in such property. Qualifying purchases

ronmental response action commencement cut-off

include home insulation, new window installation,

Head of Household. No tax is imposed if the

date is changed from August 5, 2005 to August 5,

advanced programmable thermostats, solar hot

Massachusetts AGI does not exceed $13,550 plus

2011, and the time for incurring eligible costs that

water systems, fuel-efficient furnaces, boilers, oil,

$1,000 per dependent. Heads of household are el-

qualify for the credit is extended to January 1,

gas, propane, or electric heating systems, certain

igible for the Limited Income Credit if Massachu-

2012. For more information, see TIR 06-16.

weather sealing, and other approved purchases.

setts AGI does not exceed $23,713 plus $1,750 per

The credit allowed for installation of qualifying pur-

dependent.

Historic Rehabilitation Credit Increased

chases in any one residential building is 30% of

Recent legislation extends the time period and in-

Single Filers. No Tax Status for single filers is un-

the cost; however, the credit cannot exceed $600

creases the amount of the Historic Rehabilitation

affected by the increase in the personal exemption

for a residential dwelling or $1,000 for a multi-unit

Credit. Under prior law, the credit was available

amount. For single filers, no tax is imposed if the

dwelling. Joint owners of a residential property

from January 1, 2005 to December 31, 2009, and

taxpayer’s Massachusetts AGI does not exceed

share any credit available to the property in the

was limited to $15,000,000 per year. As a result of

$8,000. Single filers are eligible for the Limited

same proportion as their ownership interest. The

the recent legislation, credit availability is extended

Income Credit if Massachusetts AGI does not ex-

credit allowed under this section may be taken in

through December 31, 2011, in an amount not to

ceed $14,000.

2005 or 2006, regardless of the exact date on

exceed $50,000,000 per year. The credit is also

Note: If married filing separately, you do not qual-

which any qualifying purchases were made. The

transferable. For more information, see TIR 06-16.

ify for No Tax Status or the Limited Income Credit.

amount of credit that exceeds the total tax due for

2005 may be carried over, as reduced, and ap-

Film Incentive Credits

Circuit Breaker Tax Credit Increased

plied against the tax liability for 2006. To take this

For tax years beginning on or after January 1,

A credit is allowed to an owner or tenant of resi-

credit, see Schedule Z, line 8. For more informa-

2006 and before January 1, 2013, motion picture

dential property located in Massachusetts equal to

tion, see TIR 05-18.

production companies may claim (1) a credit

the amount by which the real estate tax payment

equal to 20% of the total qualifying aggregate

Claim of Right Deduction

or 25% of the rent constituting real estate tax pay-

payroll for employing persons within the Common-

ment exceeds 10% of the taxpayer’s total income,

For tax years beginning on or after January 1, 2005,

wealth in connection with the filming and produc-

not to exceed $870. The amount of the credit is

taxpayers who have paid Massachusetts personal

tion of a motion picture and (2) a credit equal to

subject to limitations based on the taxpayer’s total

income taxes in a prior year on income attributed

25% of their Massachusetts production expenses.

income and the assessed value of the real estate,

to them under a “claim of right” may deduct the

Each credit has its own qualification requirements

which must not exceed $684,000. For tax year

amount of that income from their gross income if it

and a taxpayer is allowed to qualify for and claim

2006, an eligible taxpayer’s total income cannot

later develops that they were not in fact entitled to

both credits. However, the total amount of tax

exceed $46,000 for a single individual who is not

the income, and have repaid the amounts in ques-

credits allowed for any one motion picture may not

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

tion. The deduction is allowed in the year of repay-

exceed $7,000,000. The credits are also transfer-

household, and $70,000 for a husband and wife

ment, provided that the repayment is not otherwise

able. For more information, see TIR 06-1 and

filing a joint return. In order to qualify for the credit,

deductible in determining Massachusetts income

Schedule Z, line 9.

a taxpayer must be age 65 or older and must oc-

taxable under M.G.L. ch. 62. For more information,

Medical Device Tax Credit

cupy the property as his or her principal residence.

see Schedule Y, line 15 and TIR 06-4.

See TIR 06-17 for more information.

For tax years beginning on or after January 1,

Commuter Deduction

2006, medical device companies that develop or

Home Heating Fuel Deduction

For tax years beginning on or after January 1, 2006,

manufacture medical devices in Massachusetts

For 2006, certain taxpayers may take a deduction

individuals may deduct certain commuting costs

can claim a credit equal to 100% of the user fees

for expenses incurred for home heating oil, nat-

paid in excess of $150 for:

paid by them when submitting certain medical de-

ural gas or propane purchased between January

◗ tolls paid through the Massachusetts FastLane

vice applications and supplements to the United

1, 2006 and March 31, 2006, but only if they did

account; and

States Food and Drug Administration. The credit

not take the full $800 deduction for home heating

◗ the cost of weekly or monthly passes for MBTA

is also transferable. For more information, see

fuel in 2005. The deduction is available to single

TIR 06-22, and Schedule Z, line 10.

transit, bus, commuter rail or commuter boat.

taxpayers with adjusted gross income of $50,000

or less and to joint filers and heads of household

The total amount deducted may not exceed $750

New Current Code Provision

with adjusted gross income of $75,000 or less. A

per individual. Amounts paid must be reduced by

As a general rule, Massachusetts will not adopt any

qualifying taxpayer who did not take the full $800

any amounts reimbursed or otherwise deductible.

federal tax law changes incorporated into the Code

deduction in 2005 may take the remainder in

For more information, see TIR 06-14 and the

after January 1, 2005. However, certain specific

2006 for purchases made between January 1,

Schedule Y, line 16 worksheet.

provisions of the personal income tax automati-

2006 and March 31, 2006. See the Schedule Y,

cally adopt the current Code. Effective for tax years

Brownfields Credit

line 14 worksheet to calculate the amount of the

on or after January 1, 2006, a new current Code

Recent legislation extends the Brownfields credit

home heating fuel deduction. Special rules apply

provision has been adopted. The Massachusetts

to nonprofit organizations, extends the time frame

for renters and owners of condominiums and co-

Health Care bill adopted Health Savings Accounts

for eligibility for the credit, and permits the credit to

operative dwellings. See TIR 05-18, available at

on a current Code basis. See, St. 2006, c. 58, sec.

be transferred, sold, or assigned. Under prior law,

, for more information.

Instructions For Form 1-Nr/py - Massachusetts Nonresident Or Part-Year Resident Income Tax - 2006 Page 5

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