Piggybacking onto this question! This year I helped my 21 year old daughter do her MA state taxes. She earned $10,000. Per the instructions for Form 1, if you make $8,000 or less you qualify for no tax status and do not have to file a return, so theoretically I would expect that she should only be taxed on $2,000 of her income. However, the exemption amount is only $4,400. How do you explain this? She got a small benefit ($41) from the limited income credit, but her income tax after credits was still $200 which is basically 5% of $4,000. Why is she taxed on $4,000 rather than $2,000? So confused and would love to understand this discrepancy. Thank you so much!
