If you’re a Massachusetts resident filing your 2025 state taxes, you might be leaving thousands of dollars on the table without even realizing it. Many Massachusetts tax credits are underutilized, overlooked, or simply unknown to average filers. Yet, these credits are fully legal, state-approved, and designed specifically to ease the financial burden on working families, homeowners, students, and caregivers.
In this comprehensive guide, we reveal the top 10 secret Massachusetts tax credits that can save families $3,000 or more this year. Unlike deductions which only reduce taxable income these are refundable or non-refundable credits that directly lower your tax bill dollar-for-dollar. Some even result in a cash refund if they exceed what you owe.
Whether you rent in Worcester, own a home in Brookline, care for an aging parent in Springfield, or send your child to community college in Lowell, there’s likely a Massachusetts state tax credit you qualify for but haven’t claimed. Let’s uncover them.
Why Most Massachusetts Families Miss Out on These Valuable Tax Credits
Every year, the Massachusetts Department of Revenue (DOR) reports millions of dollars in unclaimed tax benefits. Why?
- Lack of awareness: Many credits aren’t advertised by tax software or even CPAs.
- Complex forms: Credits like the Circuit Breaker require separate schedules that filers skip.
- Misconceptions: People assume they “make too much” or “don’t qualify” without checking.
- Federal focus: Most taxpayers concentrate on IRS credits and ignore state-specific opportunities.
But here’s the good news: Massachusetts offers some of the most generous state-level credits in New England especially for middle-income households. And in 2025, several credits have been expanded due to state budget surpluses and cost-of-living adjustments.
💡 Key Insight: Unlike federal credits, many Massachusetts tax credits are refundable, meaning you get paid even if you owe $0 in state taxes.
How Massachusetts Tax Credits Work: Refundable vs. Non-Refundable
Before diving into the list, it’s essential to understand how these credits function:
- Refundable credits: Reduce your tax liability and any leftover amount is paid to you as a refund.
Example: Earned Income Tax Credit (EITC) at the state level. - Non-refundable credits: Only reduce your tax bill to $0 no cash back beyond that.
Example: Child and Family Tax Credit (partially non-refundable in some cases).
Massachusetts uses a 5.0% flat income tax rate (as of 2025), so even modest credits can yield significant savings. And when stacked, they can easily surpass $3,000 in total annual savings for a typical family.
Now, let’s explore the 10 secret Massachusetts tax credits most families don’t know about but should.
1. Senior Circuit Breaker Tax Credit (Refundable)
Potential Savings: Up to $1,200/year
Who Qualifies: Homeowners or renters aged 65+ with income under $73,000 (2025 limit)
Often called Massachusetts’ best-kept secret, the Senior Circuit Breaker Credit reimburses eligible seniors for a portion of their real estate taxes or rent recognizing that housing costs consume a disproportionate share of fixed incomes.
Key Details:
- Homeowners: Get up to 75% of property taxes exceeding 10% of income.
- Renters: 75% of rent (up to $4,000) counted as “property tax equivalent.”
- Fully refundable: You’ll receive a check even if you owe no state tax.
How to Claim:
- File Schedule CB with your MA tax return.
- Provide proof of age, residency, and income (Social Security statements accepted).
🏠 Pro Tip: Even if you file federally as “married filing separately,” you can still claim this credit jointly on your MA return if you live together.
2. Massachusetts Earned Income Tax Credit (EITC) – State Match
Potential Savings: Up to $810/year (30% of federal EITC)
Who Qualifies: Low-to-moderate income workers with earned income (W-2 or self-employment)
Massachusetts matches 30% of your federal Earned Income Tax Credit and it’s fully refundable. If you claimed the federal EITC, you automatically qualify for the state version.
2025 Income Limits (Approximate):
- No kids: Up to $18,000
- 1 child: Up to $49,000
- 2+ children: Up to $55,000
Why It’s Overlooked:
Many filers assume the state doesn’t offer an EITC or that they “don’t earn enough to file.” But you must file a MA return to claim it, even with $0 tax liability.
💰 Stacking Power: Combine with federal EITC ($7,830 max) + Child Tax Credit = $10,000+ in total refunds for qualifying families.
3. Dependent Care Tax Credit (State-Level Childcare Relief)
Potential Savings: Up to $480/year
Who Qualifies: Families paying for childcare for children under 13 (or disabled dependents)
While the federal Child and Dependent Care Credit gets attention, Massachusetts offers its own version equal to 30% of the first $1,600 in eligible expenses ($480 max).
Important Notes:
- Must also claim the federal credit to qualify.
- Applies to daycare, after-school programs, summer camps, and licensed babysitters.
- Non-refundable, but still reduces your MA tax bill significantly.
Real-World Impact:
A Boston family paying $12,000/year for daycare could get:
- $2,160 federal credit (2025 rate)
- +$480 MA credit
= $2,640 total savings just for childcare.
📝 Documentation: Keep receipts and provider EINs MA DOR may request them during review.
4. College Savings Contribution Credit (MEFA Match)
Potential Savings: Up to $250/year
Who Qualifies: Anyone contributing to a Massachusetts 529 plan (U.Fund MEFA)
Here’s a hidden gem: Massachusetts gives you a tax credit for saving for college. Contribute to a U.Fund MEFA 529 account, and you can claim 50% of your contribution as a credit up to $250 (i.e., contribute $500, get $250 back).
Why It’s Secret:
- Only available to MA residents.
- Not promoted by most tax software.
- Must file Schedule SC to claim.
Strategic Use:
- Grandparents can open accounts for grandchildren and claim the credit.
- Pair with federal 529 benefits (tax-free growth) for long-term education planning.
🎓 Bonus: The credit is non-refundable, but if you have any MA tax liability even $1 you can use it.
5. Brownfields Tax Credit (For Homeowners Near Redeveloped Sites)
Potential Savings: Varies often $1,000–$5,000+
Who Qualifies: Property owners near certified Brownfields sites who incur cleanup or monitoring costs
This one’s niche but powerful. If you own property adjacent to a state-certified Brownfields site (former industrial land being cleaned up), you may qualify for credits covering environmental testing, legal fees, or property value loss.
How It Works:
- Administered by MassDEP under the Brownfields Act.
- Credit equals 50–75% of eligible costs.
- Can be sold or transferred if you can’t use it.
Who Should Investigate:
- Homeowners in former mill towns (e.g., Lawrence, Fall River, New Bedford).
- Small business owners near redevelopment zones.
⚠️ Note: Requires pre-approval from MassDEP don’t assume eligibility. But if you live near a cleanup site, it’s worth a call.
6. Historic Rehabilitation Tax Credit (For Older Homeowners)
Potential Savings: Up to 20% of qualified rehab costs (often $5,000–$20,000+)
Who Qualifies: Owners of income-producing historic properties (including multi-family homes)
If you own a rental property or mixed-use building listed on the State Register of Historic Places, MA offers a credit for certified rehabilitation work (roofing, windows, masonry, etc.).
Lesser-Known Fact:
- Owner-occupants of 2–4 unit homes can qualify if one unit is rented.
- Work must follow the Secretary of the Interior’s Standards.
- Credit is non-refundable but can be carried forward 10 years.
Example:
A homeowner in Salem spends $50,000 restoring a Victorian duplex. They get a $10,000 MA tax credit plus potential federal credit.
🏛️ Check Eligibility: Search your address in the Massachusetts Cultural Resource Information System (MACRIS) .
7. Farmland Preservation Tax Credit
Potential Savings: Up to $50,000/year (lifetime cap)
Who Qualifies: Landowners who place agricultural land under permanent conservation restriction
This credit rewards farmers and rural landowners who permanently restrict development on farmland through a conservation easement.
Key Details:
- Credit = 50% of the appraised value of the easement, up to $50,000 total.
- Can be claimed over multiple years.
- Non-refundable, but transferable to family members.
Ideal For:
- Families in Western MA (Hampshire, Franklin counties).
- Those planning intergenerational farm transfers.
🌾 Impact: Preserves open space while offsetting property tax burdens double win.
8. Adoption Expense Tax Credit
Potential Savings: Up to $1,000/year
Who Qualifies: Families finalizing adoption in 2024 (claimed on 2025 return)
Massachusetts offers a $1,000 credit per adopted child to help offset legal, agency, and travel costs.
Requirements:
- Child must be under 18 (or permanently disabled).
- Adoption must be finalized in the tax year.
- Non-refundable, but stacks with the federal adoption credit ($16,810 in 2025).
Why It’s Missed:
Many assume only the federal credit exists. But MA’s version is simple: just file Schedule AD.
👨👩👧 Note: Applies to domestic, international, and foster-to-adopt cases.
9. Residential Renewable Energy Credit (Solar, Geothermal, Wind)
Potential Savings: Up to $1,000/year
Who Qualifies: Homeowners who install qualified renewable energy systems
While the federal solar tax credit covers 30%, Massachusetts adds a $1,000 state credit for solar electric, solar hot water, wind, or geothermal systems.
Details:
- One-time credit per system.
- Must be installed at your primary residence in MA.
- Non-refundable, but can be carried forward 3 years.
Combine With:
- SMART Program (monthly solar production payments)
- Mass Save rebates (up to $2,000 for heat pumps)
☀️ 2025 Update: Geothermal systems now fully qualify after recent DOR clarification.
10. Low-Income Home Energy Assistance (LIHEAP) Coordination Credit
Potential Savings: Indirect but boosts eligibility for $1,000+ in utility aid
This isn’t a direct tax credit but it’s critical. If you receive LIHEAP heating assistance, you automatically qualify for the Heating Cost Credit on your MA return, which protects your refund from being offset for utility debts.
Why It Matters:
- Prevents state from seizing your tax refund to pay old National Grid or Eversource bills.
- Ensures full EITC/Circuit Breaker refunds reach your bank account.
Action Step:
- Apply for LIHEAP by April 2025 (even if winter is over).
- Keep your approval letter it proves eligibility.
❄️ Hidden Benefit: LIHEAP recipients also get priority for Mass Save insulation upgrades worth thousands in energy savings.
How to Claim These Credits: A Step-by-Step Checklist
Don’t let paperwork stop you. Here’s how to maximize your Massachusetts tax credits in 2025:
- File a Massachusetts state return even if you owe $0.
- Use Form 1 (resident) or Form 1-NR/PY (non-resident/part-year).
- Attach required schedules:
- Schedule CB (Circuit Breaker)
- Schedule EITC (Earned Income Credit)
- Schedule SC (College Savings)
- Schedule AD (Adoption)
- Keep records for 3 years: receipts, approval letters, contracts.
- File by April 15, 2025 or October 15 with extension (but pay any tax due by April).
🛠️ Tool: Use the MA DOR’s Credit Estimator to preview your eligibility.
Final Thoughts: Stop Overpaying Start Claiming
The average Massachusetts family eligible for just three of these credits could save $3,000–$5,000 annually. Yet, thousands miss out simply because they didn’t know these secret Massachusetts tax credits existed.
You don’t need a CPA to claim them. You don’t need a high income. You just need awareness and the willingness to file a few extra forms.
So before you hit “submit” on your 2025 tax return, ask yourself:
“Have I checked every Massachusetts tax credit I might qualify for?”
If not, you could be leaving a rent payment, a month of groceries, or a year of childcare savings on the table.
Take action today. Review this list. Gather your documents. And claim every dollar the Commonwealth owes you.