The law states that any credit is applied on a “pro rata basis,” meaning those who paid more tax will benefit more. Baker administration officials cautioned Friday that the 13 percent “refund” is a preliminary estimate and that officials will finalize it in late October after all 2021 tax returns are filed. Baker’s budget office previously estimated in July that taxpayers would get back about 7 percent of the income taxes they paid in 2021. To be eligible, individuals must have filed a 2021 tax return by October 17. State officials said someone’s credit could be reduced if they have unpaid taxes, unpaid child support and other debts. The state closed its last fiscal year in June with a nearly $5 billion surplus after collecting nearly 21 percent more tax revenue than a year ago, a stunning jump. Baker aides said the surplus is large enough to cover the appropriation and estimated the state would still have about $2 billion in excess revenue, itself a huge number. “With families facing continued pressure from high prices and inflation, these returns will provide some much-needed relief,” Gov. Charlie Baker said in a statement Friday. “Even with nearly $3 billion going back to taxpayers, they remain important state and federal resources, and we look forward to working with the Legislature to invest this funding in our economy, communities and families.” State officials have created a website where people can calculate their estimated credit. The state also plans to open a five-day-a-week call center starting Tuesday to help answer people’s questions. The only other time the law was triggered was in 1987, when tax collections exceeded the allowable amount by $29.2 million, according to an earlier report from Bump’s office. At the time, the state did not issue the credit directly, but instead added a line to the 1987 version of the individual income tax return form where individual taxpayers could “enter their individually calculated share.” The state ultimately issued $16.8 million in credits, leaving nearly $12.4 million unclaimed. Whether Baker’s administration can actually issue the credits as an immediate refund may be an open debate. Kurt Wise, senior policy analyst at the Massachusetts Center on Budget and Policy, told the Globe on Thursday that the law is clear in calling the refund a “tax credit,” effectively limiting what form it can take. Wise also noted that Bump in her statement described it as “the form of credit.” The language, however, also leaves it up to the commissioner of state revenue to set rules for implementing the law. State Rep. Mike Connolly, a Cambridge Democrat who has supported limiting what high earners could get back under the credit, said Friday he is considering legal action in an effort to stop Baker from issuing checks in “this unprecedented way”. The law allows taxpayers to file an appeal to “enforce the provisions of this chapter.” Connolly said his goal is not to delay people getting the money, but for the Legislature to “take action as soon as possible to expressly and legally authorize the distribution of these refund checks this fall and at the same time adjust the distribution So middle-income and poor people see a larger share” of the nearly $3 billion. House and Senate leaders have not said they have plans to change the law or reshape how the state distributes excess revenue. The possibility of billions going back to taxpayers has rattled Beacon Hill and lands amid a separate ongoing debate over whether the state should raise taxes on some of its wealthiest residents. Baker’s revelation during the final days of the Legislature’s formal sessions in July that the state was ready to fire the decades-old law stalled talks on a $4.5 billion spending package that included about $1 billion in proposed tax relief. The Legislature adjourned its formal sessions on the morning of August 1 without agreement on the legislation, leaving the fate of a final package in limbo. In a statement Thursday, after Bump had certified the amount taxpayers would receive, House Speaker Ronald Mariano said legislative leaders intend to continue talks on a potential economic development package. This is breaking news and will be updated. Matt Stout can be reached at [email protected] Follow him on Twitter @mattpstout.
