Massachusetts’ New Estate Tax Exemption 2023

On September 26, 2023, lawmakers in Massachusetts presented a new tax relief package worth $1 billion. Governor Maura Healey approved it on October 3, 2023. This tax break has many parts, but the main focus is to help families, businesses, and people in the state save money. A big part of this break is about estate taxes (taxes on properties and money people leave behind when they die). Let’s dig into what this means for people planning their estates.

What’s New in This Tax Break?

  1. Higher Estate Tax Limit: Before, if your estate was worth more than $1 million, your estate was subject to an estate tax. Now, this limit is increased to $2 million.

  2. Special Tax Credit: There is a new tax credit of $99,600 for Estates. This credit aims to mitigate the impact on estates just above the threshold, eliminating the so-called “cliff effect.” The cliff effect is when the estate is taxed on its entire valuation, not just on the amount above the threshold. This results in relatively meager estates having to pay thousands of dollars in taxes.

What Does This Mean for Your Estate Plans?

  • Saving Money: Many more estates won’t need to pay the extra tax now, which means families can save more money when inheriting.

  • Review Your Plans: If you’ve already made plans thinking you’d be paying the old taxes, it might be time to check and update your plans.

  • Look at Other Taxes Too: This tax break isn’t just about estates. It’s a good idea to talk to a tax expert or estate lawyer to see if there are other ways you can save money.

In short, Massachusetts has a new $1 billion tax relief package. It raises the estate tax limit to $2 million, which means big savings for many people. If you’re planning your estate, it might be a good time to review and see if you can save money. Always ask a professional team of attorneys like Logan and Logan LLP. of Quincy, MA, for help to make the best choices.

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