Instructions For Form 1 - Massachusetts Resident Income Tax - 2013 Page 40
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2013 Form 1 — Schedule Instructions
home on business. However, you may fully deduct
less you answered “no” to the question on mater-
No credit is allowed if the taxpayer claims the
ial participation on the front of Schedule C. In this
“married filing separate” status, receives a federal
meals and entertainment furnished or reim bursed
to an employee if you properly treat the ex pense
case, your loss is further limited. Use the amounts
or state rent subsidy, rents from a tax-exempt en-
as wages subject to withholding. You may also
calculated on your pro forma U.S. Form 6198 to
tity, or is the dependent of another taxpayer.
fully deduct meals and entertainment provided to
complete a pro forma U.S. Form 8582. If your at-
Is the Tax Credit Considered Income?
a nonemployee to the extent the expenses are in-
risk amount is “0” or less, enter “0” in line 31.
Tax credits received by eligible taxpayers are not
cludible in the gross income of that person and re-
considered income for the purpose of obtaining
ported on Form 1099-MISC. Figure how much of
Senior Circuit
eligibility or benefits under other means-tested as-
the amount on line 23a is subject to the 50% limit.
sistance programs including food, medical, hous-
Then, enter 50% of that amount on line 23b. This
Breaker Tax Credit
ing, energy and educational assistance programs.
amount should be subtracted from the amount in
line 23a. Enter the result in line 23 of Massachu-
How Does a Taxpayer Claim
What Is It?
setts Schedule C.
the Credit?
For tax years beginning on or after January 1,
Line 30. Abandoned Building
2001, senior citizens in Massachusetts may be el-
Taxpayers who are eligible for the tax credit in the
Renovation Deduction
igible to claim a refundable credit on their state
2013 tax year can claim the credit by submitting a
income taxes for the real estate taxes they paid on
completed Schedule CB, Circuit Breaker Credit,
Massachusetts allows businesses to deduct 10%
the Massachusetts residential property they own
with their 2013 state income tax return. Eligible
of the costs incurred in renovating certain build-
or rent and which they occupy as their principal
taxpayers who do not normally file a state income
ings located in an Economic Opportunity Area
residence. The maximum credit allowed is $1,030
tax return may obtain a refund by filing a return
(EOA). The buildings must be designated as aban-
for the tax year beginning January 1, 2013. See
with Schedule CB. As with all claimed tax credits
doned by the Economic Assistance Coordinating
TIR 13-16 for more information.
and deductions, the taxpayer must keep all perti-
Council. The renovation deduction may be taken
nent records, receipts and other documentation
in addition to any other deduction for which the
Eligible taxpayers who own their property may
supporting his or her claim for the credit.
renovation costs may qualify. For more informa-
claim a credit equal to the amount by which their
tion, contact the Massachusetts Office of Business
property tax payments in tax year 2013 (exclud-
Line 1. Living Quarters Status
Development.
ing any exemptions and/or abatements), includ-
During 2013
ing water and sewer debt charges, exceed 10% of
In line 30 enter 10% of the costs of renovating a
Be sure to fill in the appropriate oval. If you were a
their “total income” for the same current tax year.
qualifying abandoned building.
renter in 2013 and you received any federal and/or
Taxpayers residing in communities that do not in-
state subsidy, or you rent from a tax-exempt entity,
Line 32. Interest (other than from
clude water and sewer debt service in their prop-
you do not qualify for the Circuit Breaker Credit.
erty tax assessments may claim, in addition to
Massachusetts banks) and Dividend
their property tax payments, 50% of the water
Homeowners, fill in the appropriate “Yes” or “No”
Income
and sewer use charges actually paid during the
oval to indicate if you owned a multi-use or multi-
If you have interest (other than from Massachu-
tax year when figuring their credit.
family property. A taxpayer who owns a principal
setts banks) and dividend income reported on
residence with a land area in excess of one acre or
Renters may claim a credit in the amount by which
U.S. Schedule C, lines 1 and/or 6 or Schedule
a multi-use building or land area, for example, a
25% of their annual rental payment is more than
C-EZ, line 1, enter that amount in line 32 and in
storefront with an apartment up above, may only
10% of their total income.
Massachusetts Schedule B, line 3. If you are not
claim the taxpayer's proportional share of the real
required to file Schedule B (see Schedule B in-
For purposes of the tax credit, a taxpayer’s “total
estate tax payments (Schedule CB, line 10), in-
structions), enter that amount on Form 1, line 20.
income” includes taxable income as well as ex-
cluding water and sewer use charges (Schedule
Do not include such amounts on Massachusetts
empt income such as Social Security, Treasury
CB, line 13), which corresponds to the portion of
Schedule C, lines 1 and/or 4.
bills and public pensions. For a complete list of
the residence used and occupied as principal res-
what constitutes “total income,” see TIR 01-19.
Line 33. If You Have a Loss
idence. A taxpayer who owns a multiple family
dwelling (a multi-family residence that includes
Fill in the oval in line 33a if all of your investment
Who Is Eligible for the Credit?
the taxpayer's personal residence), may only
is at risk. Enter your loss from line 31 on Form 1,
To be eligible for the credit for the 2013 tax year, a
claim the taxpayer's proportional share of the
line 6 unless you answered “no” to the question
taxpayer must be 65 years of age or older before
taxes (Schedule CB, line 10) or sewer and water
on material participation on the front of Schedule
January 1, 2014 (for joint filers, it is sufficient if
use charges (Schedule CB, line13) paid. For ex-
C. If you answered “no” to this question, complete
one taxpayer is 65 years of age or older), must
ample, where a condominium association pays
a pro forma copy of U.S. Form 8582 that reflects
own or rent residential property in Massachusetts
one sewer and water bill for multiple owners, each
only income being reported on your Massachusetts
and occupy the property as his or her principal res-
owner may only claim the proportional share of
return. Enter in Massachusetts Schedule C, line 31
idence, and must not be the dependent of another
the use charges attributable to the taxpayer's
your allowable loss calculated on Form 8582.
taxpayer. The taxpayer’s total income cannot ex-
condominium (for example, the condominium
ceed $55,000 for a single filer who is not the head
Fill in the oval in line 33b if only some of your in-
owner's percentage interest in the undivided in-
of a household, $69,000 for a head of household,
vestment is at risk. To determine the amount of
terest of common areas and facilities).
or $82,000 for taxpayers filing jointly. No credit is
your allowable loss, complete a pro forma copy of
allowed for a married taxpayer unless a joint re-
U.S. Form 6198 that reflects only income being
turn is filed. Moreover, the assessed valuation of
reported on your Massachusetts return. Enter the
the real estate cannot exceed $700,000.
amount calculated on U.S. Form 6198 in line 31 un-
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