Instructions For Massachusetts Urban Redevelopment Excise Return Form 121a - 2016 Page 2
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3Major 2016 Tax Law Changes
Certified Housing Development Tax
Credit
Consent to Extend the Time to Act on an
Effective January 1, 2017, the certified housing development tax
Amended Return Treated as an
credit allows corporate excise taxpayers to claim 25% of qualified
Abatement Application
project expenditures as a credit. The credit may also be carried for-
ward for up to 10 years. For further information, see TIR 16-15.
The Department has established a consent proc ess that will protect
a taxpayer’s appeal rights in instances where a taxpayer’s amended
Who Must File
return is treated by the Department as an abatement application. In
such instances, the Department will consider the taxpayer’s act of fil-
Every corporation, individual, trust, partnership or entity subject to
ing an amended return, either electronically or on paper, to constitute
Massachusetts General Law Chapter 121A, as amended, must file
the taxpayer’s written consent to grant the Commissioner additional
an annual return on Form 121A.
time to act on an amended return treated as an abatement applica-
When and Where Returns Are Filed
tion. For further in formation, see TIR 16-11.
This return covers the 2016 calendar year and is due on or before
Economic Development Incentive
March 15, 2017. Returns should be mailed to the Massachusetts
Program Tax Credit
Department of Revenue, PO Box 7052, Boston, MA 02204. Returns
may also be filed using the MassTaxConnect application available
For projects certified after January 1, 2017, the economic develop-
at
ment incentive program tax credit is no longer calculated based on
the cost of property that qualifies for the investment tax credit al-
Extension of Time for Filing
lowed under G.L. c. 63, § 31A and is instead determined by the
Extension of time for filing returns will be automatically granted
Economic Assistance Coordinating Council based on factors set out
upon request. A taxpayer requesting an extension must file Form
in G.L. c. 23A, § 3D. In addition, limitations on the maximum amount
355-7004 Misc. on or before March 15, 2017. At the time of filing
of the credit awarded to particular types of certified projects have
Form 355-7004 Misc., taxpayers are required to pay 50% of the tax
been eliminated, the credit is only subject to recapture if the Eco-
shown to be due on the return when filed, less credits, if any, for
nomic Assistance Coordinating Council revokes the certification of a
previous payments made. Failure to pay the minimum extension
proj ect, and the credit may be designated as refundable in relation
payment will result in the voiding of the extension and the imposi-
to any certified project. For further information, see TIR 16-15.
tion of a late filing penalty.
Community Investment Tax Credit
Penalty for Late Return
Effective August 10, 2016, the community investment tax credit has
Failure to file this return on or before March 15, 2017 or within any
been modified. A community partner may now claim a subsequent
extension of time granted, will subject the taxpayer to a penalty of
community investment tax credit if the Department of Housing and
1% of the amount required to be shown as the tax less payments
Community Development determines that the community partner
made on or before March 15, 2017 for each month or fraction
has made satisfactory prog ress towards utilizing any prior allocation
thereof, of delinquency up to a maximum of 25%.
it has received. For further information, see TIR 16-15.
Payment of Tax
Low-Income Housing Tax Credit
The entire amount of the tax less any previous payments made is
Effective January 1, 2017, the low-income housing tax credit has
due and payable on the due date. Even though the corporation may
been expanded to also provide a non-refundable tax credit for corpo-
obtain an extension of time for filing its return, there is no provision
rate excise taxpayers that donate real or personal property to certain
in the law for extending the time for payment.
non-profit entities for use in purchasing, constructing, or rehabilitat-
ing a qualified Massachusetts project. This credit is generally limited
What Is a Valid Return?
to 50% of the amount of the donation. The credit must be claimed in
the year that the qualifying donation is made and credit amounts that
A valid return is a return which properly documents how the tax-
exceed the tax due may be carried forward for up to five years. For
payer arrived at their gross income figure on line 1. Preliminary or
further information, see TIR 16-15.
final audited financial statements and/or a copy of the federal form
filed by the taxpayer are examples of proper documentation. In ad-
Historic Rehabilitation Tax Credit
dition, the taxpayer must submit a letter from their city or town as-
sessor attesting to the fair cash value of their property as of January
Effective August 10, 2016, the historic rehabilitation tax credit has
1, 2017. Failure to meet these minimum requirements may result in
been modified to allow the Massachusetts Historical Commission to,
a penalty for filing an insufficient return.
subject to certain criteria, transfer the historic rehabilitation tax credit
to corporate excise taxpayers that acquire a qualified historic struc-
Whole Dollar Method
ture. For multi-phased projects, the Massachusetts Historical Com-
mission may transfer historic rehabilitation tax credit awards for any
The whole dollar method should be used when entering amounts
phase that meets the criteria. For further information, see TIR 16-15.
on the return.
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