BOSTON (CBS/AP) — Massachusetts taxpayers will start paying a lower state income tax rate beginning in January.
But it won’t be much.
Revenue Commissioner Amy Pitter confirmed Wednesday that all the requirements needed to automatically lower the personal income tax rate from 5.2 percent to 5.15 percent beginning Jan. 1 have been met.
So what does that mean for you?
According to WBZ NewsRadio 1030, for every $1,000 of taxable income, you will now get to keep an extra 50 cents.
WBZ’s Joe Mathieu crunched the numbers, and based on the median household income in Massachusetts of $61,000 a year, that would be a savings of about $30 in 2015.
The extra money going to taxpayers means that tax revenues for the state will drop by about $70 million for the remainder of the fiscal year, which ends June 30.
The Commonwealth is estimating a $329 million budget gap for the end of the fiscal year.
State officials are looking for ways to close the gap even as Democratic Gov. Deval Patrick prepares to leave office and Republican Gov.-elect Charlie Baker takes over.
Patrick last month ordered $198 million in immediate spending cuts to help close the gap.
The state’s total budget is $36.5 billion.
Massachusetts voters approved a ballot question in 2000 to gradually lower the income tax rate from 5.95 percent to 5 percent.
In 2002, the Legislature froze the rate at 5.3 percent, but also added a mechanism that would allow the rate to fall in increments of 0.05 percent if growth in annual revenues meets certain benchmarks.
The rate was reduced from 5.3 to 5.25 percent Jan. 1, 2012, and again last January when it fell to 5.2 percent.
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