Massachusetts Excess Tax Revenue Refunds Begins November 1, 2022

 

Distribution of Excess Tax Revenue Refunds Begins November 1, 2022

Tomorrow the Department of Revenue (DOR) will begin the distribution of $2.941 billion in tax refunds in accordance with Chapter 62F, a Massachusetts law that requires tax revenue collected in excess of an annual cap to be returned to taxpayers. Refunds will be provided in proportion to Massachusetts income tax liability incurred by taxpayers in the immediately preceding taxable year – Tax Year 2021. In the coming weeks, an estimated 3 million taxpayers will receive a refund equal to 14% of their 2021 Massachusetts income tax liability. This is higher than the previously shared preliminary estimate of 13%, which was based on projections made prior to the tax extension due date of October 17, 2022.   Refunds will be issued via direct deposit or mailed as a check. Refunds issued by direct deposit will be labeled “MASTTAXRFD”. Refunds mailed as a check will include several sentences on the check explaining Chapter 62F and why the recipient is receiving a refund. Approximately 500,000 refunds will be distributed during the first week. Approximately one million refunds will be distributed weekly thereafter until all currently eligible refunds have been distributed.   Taxpayers who have already filed their 2021 tax return and had a tax liability will automatically receive their refund by December 15, 2022 – no action is needed. Individuals who have not yet filed their 2021 tax return but file by September 15, 2023 will be eligible to receive a refund. Such individuals, if eligible, will receive their refund automatically approximately one month after filing.   Note that an individual’s credit may be reduced due to refund intercepts, including for unpaid taxes, unpaid child support, and certain other debts.   Additional information about Chapter 62F taxpayer refunds, including Frequently Asked Questions and a refund estimator, can be found at www.mass.gov/62Frefunds.   A call center is available to answer questions about 62F refunds at 877-677-9727 and is open Monday through Friday, 9am-4pm. The call center will not be able to provide exact refund amounts – however, the estimator on the FAQs page can help individuals calculate an estimate.    About Chapter 62F Chapter 62F is a Massachusetts law enacted by voters in 1986 via a ballot question that requires the Department of Revenue to issue a credit to taxpayers if total tax revenues in a given fiscal year exceed an annual cap tied to wage and salary growth in the Commonwealth.   The law requires that the Department of Revenue submit a report to the State Auditor on the net state tax revenues and the allowable state tax revenues for each fiscal year by September 1st. The State Auditor then makes the determination of whether net state tax revenues exceed allowable state tax revenues – and, if so, by what amount – on or before the third Tuesday of September.   See the State Auditor’s report for Fiscal Year 2022, which certified that net state tax revenues exceeded allowable revenues by $2.941 billion, here.   The Chapter 62F process has been triggered once before, in 1987.