How to input MA limited income credit? I have it in 2021 MA return, but not in 2022 Form 1.

[janetgan]

Turbo tax calculate LIC for me last year, but not this year. According to MA tax rules, we should get it. But I can not input it and don't know how to fix this.

[JohnW152]

TurboTax will automatically generate the Limited Income Credit (LIC) if you meet the requirements.  There's nothing that you'd need to input manually.

It could be that you qualify for No Tax Status, which means that you wouldn't qualify for the LIC.  If your Massachusetts adjusted gross income was

• $8,000 or less if you're single
• $14,400 or less plus $1,000 per dependent if you're claiming head of household, or 
• $16,400 or less plus $1,000 per dependent if you're claiming married filing a joint return

you qualify for No Tax Status and are not required to pay any Massachusetts income taxes.

If you don't qualify for No Tax Status, but your Massachusetts AGI doesn't exceed certain limits, you may qualify for the LIC.

Page 13 of Massachusetts' Form 1 Instructions includes a chart which shows situations in which you might claim either No Tax Status or the LIC. 

Bear in mind that you'd need to compute your Massachusetts AGI as if you're a Massachusetts resident for the entire year.  You need to include all income from whatever source derived -- Massachusetts income and non-Massachusetts source income, including any deductions from your Schedule Y, Lines 2 to 10 and Line 18 deductions. Any losses would be computed as zero.

See Learn about No Tax Status and Limited Income Credit and No Tax Status and Limited Income Credit in the Form 1 Instructions for more information.

If it still appears that you qualify for the LIC after seeing this, please respond back, including any additional information that might of assistance.

[dvbaker24]

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!