MA Senior CB Credit

[chinka]

I am looking to verify on whether or not a government pension, that was not taxed on the Federal side, needs to be added into income when determining the eligibility of the Senior Circuit Breaker Credit. mass.gov vaguely states that generally any amount that is excluded from federal gross income is not added-back in. Has anyone fought the good fight with MA DOR and won?

[Burke]

There is a govt pension that is tax-free? Do you mean VA benefits?

[chinka]

Not VA benefits

There is a govt pension that is tax-free? Do you mean VA benefits?

The retired city workers' pension is only taxed on a set amount each year, just over $5K of the $40K plus actually received each year. The $5K still qualifies the taxpayer for the Senior CB Credit, but the full $40K would not.

[taxmom34]

when determining the senior CB credit all nontaxable income is added back in (such as VA benefits and social security). the credit is for poor elders, your client has $40k of income that is not a poor person.

[ATSMAN]

Use the CB worksheet and instructions. In my opinion this is one of the most misused refundable tax credit (up to $1000) that many seniors get even though their income for this credit purpose exceeds the limits. I once had to tell a retired state trooper that he did NOT qualify for this credit even though his $70,000 state pension was completely tax exempt! People think that if the income is not taxed in MA you don't need to include it in the calculation for qualification.