Massachusetts State Tax Credits
More ways to save your hard-earned money from the tax man!
Massachusetts has some great State Tax Credits for you....
Thank you so much for checking our resource out here for your state and congratulations for taking a proactive step to paying less in taxes. For your state, we have identified the tax credits that are currently being offered to help you pay less in state taxes.
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Massachusetts Registered Apprentice Tax Credit (RATC)
Overview:
The Massachusetts Registered Apprentice Tax Credit (RATC) provides a refundable state tax credit to employers who hire and retain registered apprentices in approved occupations. Employers can claim 50% of wages paid—up to $4,800 per apprentice per year—with a $100,000 annual credit cap.
Who It’s For:
Massachusetts employers registered with the Division of Apprentice Standards (DAS) as apprenticeship sponsors who employ eligible apprentices in qualifying trades for at least 180 days.
Four Key Highlights:
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50% Credit on Apprentice Wages
Employers can claim up to $4,800 per apprentice annually, for up to two years per apprentice. -
Refundable & Capped at $100,000
Credits are fully refundable if they exceed tax liability, with a $100,000 annual maximum per employer. -
Occupation-Specific Eligibility
Applies only to apprentices in DAS-approved roles; does not apply to licensure-required programs. -
Rolling Application with Firm Deadline
Applications are reviewed year-round, but must be submitted by March 31, 2025 for the 2024 tax year.
Massachusetts Economic Development Incentive Program Credit (EDIPC)
Overview:
The EDIPC offers tax credits to businesses that significantly contribute to job creation and economic development in Massachusetts. Approved certified projects may earn credits up to 10% (or sometimes 40%) of qualified property investment costs, or up to $5,000 per job created, as determined by the Economic Assistance Coordinating Council (EACC).
Who It’s For:
Massachusetts-based individuals, partnerships, and corporations with EACC-certified business expansion or job creation projects that involve investment in eligible property and meet state development goals.
Four Key Highlights:
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Up to 10% (or 40%) Credit on Eligible Investments
Covers tangible personal property and certain real property improvements with a 4-year useful life, used exclusively in a certified project. -
Job Creation Bonus of $5,000 Per Position
For certified job creation projects, EACC may approve credits per qualifying full-time job added. -
Refundable and Carryforward Flexibility
EACC may designate credits as refundable; otherwise, they may be carried forward indefinitely (subject to certain limits). -
Strict Certification and Compliance Rules
Projects must be pre-certified by the EACC and remain compliant to avoid credit recapture or disqualification.
Massachusetts Brownfields Tax Credit (BTC)
Overview:
The Brownfields Tax Credit encourages cleanup and redevelopment of contaminated sites in Economically Distressed Areas (EDAs) across Massachusetts. Taxpayers who remediate these properties for business use may receive a credit worth up to 50% of eligible cleanup costs.
Who It’s For:
Businesses, individuals, and nonprofits that clean up contaminated properties in EDAs for commercial or business purposes and meet state environmental compliance standards.
Four Key Highlights:
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Credit up to 50% of Eligible Cleanup Costs
Earn 25% if restrictions remain on the site or 50% if restored to unrestricted use. -
Eligibility Tied to Location and Cleanup Status
Property must be in an EDA, reported to MassDEP, and achieve Permanent Solution or Remedy Operation Status (ROS). -
Transferable and Carryforward-Friendly
Unused credits can be carried forward for 5 years and transferred to other taxpayers. -
Strict Documentation and Compliance Required
Applicants must submit Form BCA electronically via MassTaxConnect with comprehensive records, including an LSP narrative, cleanup costs, ownership proof, and tax compliance.
Massachusetts Certified Housing Development Tax Credit (CHDC)
Overview:
The CHDC offers a tax credit of up to 25% of qualified expenditures for new construction or substantial rehabilitation of housing projects in Gateway Municipalities. It supports residential growth, neighborhood revitalization, and economic development through the Housing Development Incentive Program (HDIP).
Who It’s For:
Personal and corporate taxpayers who invest in certified housing development projects approved by the Executive Office of Housing and Livable Communities (EOHLC) under the HDIP.
Four Key Highlights:
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Up to 25% Credit for Qualified Housing Costs
Includes construction-related expenses like site prep and remediation—excluding land acquisition. -
Annual Statewide Cap
$57M cap in 2023; reduced to $30M per year beginning in 2024. -
Flexible Use with Carryforward & Transfer Options
Credits may be carried forward up to 10 years or transferred to another taxpayer (non-refundable). -
Certification Required Before Claiming
EOHLC must certify project completion and expenses before the credit can be claimed on a tax return.
Massachusetts Low-Income Housing Tax Credit (LIHTC)
Overview:
The Massachusetts LIHTC provides up to a 25% tax credit to individuals, partnerships, or corporations that invest in or donate to qualified low-income housing projects. It encourages the development and preservation of affordable housing across the state and complements the federal LIHTC program.
Who It’s For:
Massachusetts-based developers, investors, or donors who participate in state-certified low-income housing projects or donate to qualifying nonprofit housing organizations.
Four Key Highlights:
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Up to 25% Credit Over 5 Years
Credits for investments are claimed in equal parts over five years, while donation-based credits are claimed in the year of the donation. -
$60M Annual Allocation (Plus $5M for Preservation)
Includes base credits, unused carryovers from prior years, and a separate allocation for preserving assisted housing. -
Carryforward & Transferable Options
Unused credits may be carried forward for up to 5 years or transferred to another taxpayer. -
EOHLC Certification & Federal Compliance Required
Projects must be certified by the Executive Office of Housing and Livable Communities and comply with both federal and state low-income housing regulations.
Massachusetts Community Investment Tax Credit (CITC)
Overview:
The Massachusetts CITC offers a 50% state tax credit to individuals and businesses making cash donations to certified community development organizations. Designed to support economic opportunities for low- and moderate-income households, this program incentivizes local impact investing through refundable and carryforward-eligible credits.
Who It’s For:
Massachusetts personal income tax filers and corporate excise taxpayers who donate cash to EOHLC-certified community partners or partnership funds.
Four Key Highlights:
-
50% Credit for Cash Donations
Contribute to local economic development and receive half the donation back as a tax credit. -
Refundable or 5-Year Carryforward
If the credit exceeds your tax liability, you can either get a refund or carry it forward for up to five years. -
$12M Annual State Cap
Credits are awarded on a first-come, first-served basis—so early donations have a better shot at qualifying. -
EOHLC Certification Required
Contributions must be approved and certified by the Executive Office of Housing and Livable Communities to qualify.