On October 4, 2023, Governor Maura Healey ratified Bill H. 4104, doubling the Massachusetts estate tax exemption amount from $1 million to $2 million.
Unlike the prior Massachusetts estate tax law, which imposed estate tax on the entire estate (not just the excess over $1 million), the new law taxes only the amount exceeding $2 million. Unlike the federal estate tax law, the Massachusetts exemption is not indexed for inflation and any unused exemption cannot be transferred or “ported” to a surviving spouse.
The new law applies to estates of decedents who passed away on or after January 2, 2023. If estates have already filed their returns for decedents who passed away this year, it may be worth amending returns to take advantage of the increased exemption amount.
- The Massachusetts estate tax exemption has been raised from $1 million to $2 million.
- Massachusetts estate tax is imposed only on the portion of the estate exceeding $2 million.
- Unlike the federal estate tax, the Massachusetts estate tax is not indexed for inflation.
- Unlike the federal estate tax, there is no portability, i.e., a decedents unused exemption cannot be transferred to a surviving spouse.
- The increased Massachusetts exemption is available for decedents dying on or after January 1, 2023. Estates that have already filed returns for 2023 may benefit from filing amended returns.
For more information about the information in this alert, reach out to the author, Rachel Wassel.