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thuyh1121
Level 2

State tax credit count against real estate expenses

I paid for lead paint removal costing $2900 on a rental property. MA has a lead removal tax credit for $1500. If I take the credit, does my expense for the work become $1400 (I'm not sure if it would ordinarily be an depreciable improvement, but since I'm taking the Safe Harbor for Small Taxpayers it shouldn't matter).

 

Bonus: Does it matter that my MA tax liability for this year is less than $1500, so I will be carrying over part of the credit?

1 Best answer

Accepted Solutions
ReneeM7122
Level 6

State tax credit count against real estate expenses

No, if you get a state credit, you don't have to reduce your taxable income.

Here is a TurboTax article about credits.

 

And yes, unused credit can be carried forward on your MA tax return.  Here's a link with more information.

 

 

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3 Replies
ReneeM7122
Level 6

State tax credit count against real estate expenses

No, if you get a state credit, you don't have to reduce your taxable income.

Here is a TurboTax article about credits.

 

And yes, unused credit can be carried forward on your MA tax return.  Here's a link with more information.

 

 

View solution in original post

thuyh1121
Level 2

State tax credit count against real estate expenses

I had thought that it wouldn't count, but I did run across this:

https://www.biggerpockets.com/forums/51/topics/114086-tax-credit-for-lead-abatement

 

thuyh1121
Level 2

State tax credit count against real estate expenses

For anyone else seeing this, I asked another expert and he concurred that federal returns should be unaffected, although Massachusetts requires that you adjust down the expense on your state return.

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