Massachusetts Estate Taxes

Massachusetts is one of a few states that still impose an estate tax.  The Massachusetts Department of Revenue defines the state laws governing estate for Massachusetts.  The current laws related to estate tax in Massachusetts have been in place since January 1, 2006 and apply to those who died on or after that date.

Following is an overview of the current estate tax laws in effect for Massachusetts.  For more information about federal income taxes, please visit our web site’s “Tax Relief” page.

What are estate taxes?

An estate refers to the possessions someone leaves behind at the time of his death.  When a person dies and that person has a will, his or her property passes to the family, friends, or other individuals or organizations as defined in the will.  When the person does not have a will, the decedent’s property passes to others based on applicable state or federal probate laws.

For the transfer of property through an estate, various government agencies—which can be the government of those states that have estate tax laws or  the federal government through the Internal Revenue Service (IRS)—impose tax on the estate related to the transfer of property from one person to another at the time of death.  As the property is going to a person or persons who did not pay for the property or an interest in the property, the transfer is treated as income when it exceeds a certain value or amount.  Therefore, a tax is imposed on that value, which is known as the estate tax.

Who is required to file an estate tax return in Massachusetts?

The executor of an estate is required to file an estate tax return if the decedent was a resident of Massachusetts or the estate includes real or tangible personal property actually located in the state of Massachusetts.

What is the value threshold when estate taxes apply in Massachusetts?

If the decedent died on or after January 1, 2006, the estate of a decedent must pay Massachusetts estate tax if the gross estate has a value of at least $1,000,000.

The estate tax threshold in Massachusetts does not tie directly with the exclusion amount defined for federal estate tax purposes.  From a federal standpoint, those dying on or after January 1, 2012, must have an estate valued at $5,120,000 or more before estate tax applies.

What forms does Massachusetts require the executor to file related to Massachusetts estate taxes?  Where must those forms be filed?

If the decedent was a resident of Massachusetts at the time of his or her death, the decedent’s estate must file Form M-706 Massachusetts Resident Estate Tax Return.  If the decedent was a non-resident of Massachusetts, he must file Form M-NRA Massachusetts Nonresident Decedent Affidavit.

Estate tax forms and payments should be mailed to the following address:

Massachusetts Estate Tax Unit

PO Box 7023

Boston, MA 02204

When are Massachusetts estate taxes due?

An executor must file and pay Massachusetts estate taxes within nine months of a decedent’s death.  The executor can submit Form M-4768 Extension of Time to File Massachusetts Estate Tax Return to obtain an extension for a “reasonable period.”  However, the executor must still estimate the amount of estate tax that will be due and pay at least 80 percent of the estimated total by the original due date.  Otherwise, the estate may have to pay penalties for both late filing and late payment of estate taxes.  The estate will be assessed interest on any unpaid balance as of the original due date, even if at least 80 percent of the balance due is paid by that time.

What should I do if I need help with my Massachusetts estate taxes?

Should you have questions about estate taxes, income taxes, or any other tax issues, you can get answers to your questions by calling the telephone number located at the top of this web site or completing the form below.  A tax attorney will get in touch with you to have an initial conversation about your tax questions whatever those questions may be.  This conversation is completely confidential and free of charge, and it does not obligate you to anything further.

So if you have tax questions, please take the steps to get answers today.

by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.