Don’t Miss Your Opportunity to Resolve Past Tax Issues
The Massachusetts Department of Revenue (“Department”) recently released guidance for the 2024 tax amnesty program. It opened for eligible taxpayers from November 1, 2024 through December 30, 2024 (“Amnesty Period”)1. Below is a summary of the key points to note for this amnesty.
Eligible Tax Types and Deadlines
Most Massachusetts tax types are eligible for the amnesty, including personal income tax, corporate excise tax, and sales/use tax. To participate, you must submit an Amnesty Request for each eligible tax type you wish to include.
All Amnesty Requests must be submitted electronically via MassTaxConnect during the Amnesty Period. Returns and payments must also be submitted along with the Amnesty Request,. This can be either electronically or by mail postmarked no later than 11:59 PM EST on December 30th.
Who is Eligible for the Amnesty?
Eligible taxpayers must meet one of the following criteria:
- Failed to File: Failed to file a Massachusetts tax return that was due on or before December 31, 2024.
- Underreported Income: Has not reported the full amount of tax properly due on a previously filed Massachusetts tax return that was due on or before December 31, 2024.
- Incorrect or Insufficient Return: Has filed an incorrect or insufficient Massachusetts tax return.
- Outstanding Assessment: Has an assessment of one of the following types:
- An unpaid and self-assessed tax liability stated on a bill issued by the Commissioner on or before December 30, 2024.
- A tax liability assessed by the Commissioner on or before December 30, 2024, that remains unpaid.
General Amnesty Criteria
Amnesty will be granted to eligible taxpayers who (1) failed to file a return that was due prior to December 31, 2024, files the overdue return, and pays the full amount of tax and interest due, or (2) failed to pay the full amount of tax properly due on a previously filed return, files an amended return, and pays the additional tax and interest due
Benefits of Participating in the 2024 Massachusetts Tax Amnesty Program
There are several benefits to participating in the Massachusetts Tax Amnesty Program:
- Penalty Waiver: Many penalty types will be waived, but interest will still apply.
- Limited Look-back Period: A three-year limited look-back period for non-filers. This means that you will not be required to file returns or pay taxes for periods prior to January 1, 2022.
- Opportunity to Resolve Past Issues: This is a chance to clean up past tax issues and avoid potential penalties.
Important Considerations for Trustee Taxes
It’s worth noting that Massachusetts guidance says the limited look-back period will not apply in the case of a taxpayer submitting an Amnesty Request to report trustee tax (i.e., sales/use tax, meals tax, withholding tax, etc.) where any portion of the tax was collected for any of the tax periods during the limited look-back period. The taxpayer is otherwise eligible to participate in the Amnesty Program and to receive a waiver of tax penalties for any trustee tax fully paid and reported as part of an Amnesty Request.
However, we at Clarus Partners think the wording presented is not actually what they meant to say. Since these are trust taxes collected and not remitted, we believe that the Department meant to say that the limited look-back period will not apply where any portion of the tax was collected for any of the tax periods prior to the limited look-back period. In other words, if there is collected but not remitted trust taxes, no matter how far back, those will have to be remitted as part of the amnesty. This question has been presented to the Department and we are waiting for a response
Take Advantage of This Massachusetts Tax Amnesty
If your business has potential Massachusetts sales/use tax exposures that it has contemplated cleaning up in the past, now might be a great time to finally do that, but you must act fast!
Let Clarus Partners help you navigate this new amnesty program.
- Technical Information Release 24-12, Massachusetts Department of Revenue (November 1, 2024) – TIR 24-12: Amnesty Program for Taxpayers with Certain Tax Liabilities | Mass.gov
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