BOSTON (WWLP) – The state is flushed with cash, so much so that the surplus revenue has to be returned.
Taxpayers can expect to receive checks or direct deposits likely starting in November thanks to a law known as Chapter 62F. Roughly 3.6 million taxpayers are set to receive money back after the state brought in nearly 3 billion tax dollars over the legal limit.
Chapter 62F is a 1986 voter-approved law that caps allowable state tax collections at a level that is tied to annual wage and salary growth. Revenue above said cap is to be returned to taxpayers through a credit.
However, the Baker administration decided it will return the money by checks and direct deposits. The amount of the refund will be proportional to what a taxpayer paid in.
It is estimated that the total refund will be about 13% of a taxpayer’s 2021 personal income tax liability. Baker’s budget office did stress that the number could change once refunds are finalized. Those who paid more in taxes will receive larger checks.
Chapter 62F caught lawmakers off guard as they were working through other tax relief measures, including $250 checks to middle-income tax filers, at the end of the session. They were unsure if they would have enough money to pay out Chapter 62F and proposed tax relief measures.
Even though Chapter 62F has been finalized, lawmakers are still uncertain about providing further tax relief. To be eligible for the return, taxpayers must have filed a 2021 state tax return by October 17th of this year.