Tax changes coming to Mass. in 2025. Here’s what to know.

New changes to Massachusetts tax law are going into effect in 2025, including the full realization of an expanded tax credit first signed by the governor in 2023. 

As part of the $1 billion tax package Gov. Maura Healey signed into law, parents of children or caretakers for disabled adults or seniors have access to what officials called the most generous Child and Family Tax Credit in the country. 

The bill first increased the credit for what taxpayers could claim on their 2023 taxes from $180 to $310. For the 2024 tax year and all others moving forward, they can claim $440 per dependent. 

The law also got rid of the two-dependent cap on the credit when it was first signed. So this spring, for example, a family with four dependent children could claim $1,760, up from $360 before the law was passed. All in all, an estimated 565,000 families are expected to benefit. 

Beginning in 2025, the state will change how it calculates corporate taxes. Before this year, how much most multi-state companies paid in taxes was formulated using three factors: its local employment numbers, its property holdings, and in-state sales. Now, with the implementation of the so-called “single sales factor,” a company’s in-state sales are the only factor being considered. 

Companies with large in-state operations stand to benefit. This includes those headquartered in Massachusetts like State Street, TripAdvisor, and Dunkin’, as well as those that have large offices here but are headquartered somewhere else, like BNY Mellon and Citizens Bank. Many states in New England and around the country already use a single sales factor.