LAST WEEK, the Legislature passed the Commonwealth’s largest tax relief bill in a generation – and today Gov. Maura Healey will sign the bill into law. The culmination of more than a year of work by the Legislature, this law strikes the critically important balance of providing tangible, permanent financial relief for Massachusetts families, seniors, and businesses, while ensuring that robust state funding for the Commonwealth’s most vital programs and institutions will continue.

Some of the ways this bill will make Massachusetts more affordable and equitable for residents, and help our businesses compete nationally include:

  • For families struggling with rising costs, they will now have the single most generous universal child and dependent tax credit in the country. More than 565,000 families will be eligible for this tax credit, which will increase the dependent tax credit from $180 to $440 over the next two years, while eliminating the cap on this benefit.
  • For businesses fighting to stay competitive, Massachusetts’ tax rates will be more in line with states with which we compete for jobs. The law establishes a single sales factor to simplify the tax code for Commonwealth businesses and eliminates the tax on estates under $2 million. This will ensure more businesses stay here in the Commonwealth instead of relocating to states like South Carolina and Texas.
  • For renters facing serious barriers to affordability, housing will be more affordable in the places we need it most. To spur over $4 billion of private investment and create another 12,500 affordable homes in Gateway Cities, it increases the statewide cap on the Housing Development Incentive Program from $10 million to $57 million one-time and then to $30 million annually. To create thousands of new units of affordable housing, it increases the Low-Income Housing Tax Credit. And, the law increases by one-third the amount more than 800,000 renters can deduct from their taxes – to $4,000.
  • For working individuals and families trying to make ends meet, the law increases the Earned Income Tax Credit. While Massachusetts taxpayers with incomes under $60,000 can currently take an additional 30 percent of this federal credit, the new law increases that to 40 percent, helping keep nearly 400,000 residents and their families out of poverty.
  • For seniors fighting to age in place, the law doubles the so-called “circuit breaker” tax credit. Too many seniors struggle to stay in their homes due to high housing costs This step alone will put an additional $1,200 in the pocketbooks of 100,000 seniors every year.
  • For Massachusetts investors that have been taxed at a rate that is far higher than the national average, this tax relief package reduces the tax rate on short-term capital gains from 12 percent to 8.5 percent.

This is just a portion of what’s in this bill, and we encourage those interested in learning more to read it.

That’s what the law does – but its importance is also about what it represents. In the wake of a pandemic that exacerbated the challenges facing every family and institution in the Commonwealth, citizens and businesses alike have stressed that the single most important issue to them is affordability – the ability to continue to live and thrive in Massachusetts.

That challenge, ensuring that Massachusetts can be an affordable place for residents of all income levels, is why this tax relief package is far from the only action that the Legislature has taken this session to address the issue of affordability.

The House and Senate also worked together to pass universal free school meals for our public-school students – saving each family of a school age child more than $1,200 per year. We passed free community college tuition for people over the age of 25 and for aspiring nurses—saving each of those students more than $4,000 per year in tuition. We also created tuition equity for undocumented college students, added $1.5 billion in funding to improve access to early childhood education and care, and more than $1 billion for housing and rental assistance.

But the job’s not done. As we look ahead to the remainder of this session, we’ll remain focused on ensuring that the cost of living doesn’t price residents and businesses out of Massachusetts. The Legislature will continue to work to address the affordability concerns that we have heard again and again from folks across the Commonwealth.

Along with Gov. Healey, we are focused on delivering on the promise of Massachusetts — the promise to make our Commonwealth more affordable, more competitive, and more equitable, so that every one of our residents and businesses can share in the success of a thriving Massachusetts.

Karen Spilka is president of the Massachusetts  Senate. Ronald Mariano is speaker of the Massachusetts House of Representatives.