State of Massachusetts allows a certain amount of interest from Mass banks to be exempt from income
Massachusetts bank interest is literally interest that you get paid from a bank or other institution that is located in Massachusetts.
Back when banks were not nationwide, this made a lot of sense and was easy, but now it is very convoluted. When you look at the chart below you will see it can even include pawnbroker interest if the pawnbroker was in Mass.
Basically, if the bank has a branch or even an ATM in Mass, you can claim Mass Bank Interest if they paid you interest on an account you have there.
The Department of Revenue has had to make a nifty chart to help people figure out what is and is not a "bank." It is very long, but helpful so I will attach the link.
See this link for how to enter it.
I tried the link to the Department of Revenue, but it was cut off on screen and sent me only to the main page, where I tried to but couldn't find the information. Can you resend the full link?
Thanks!
No. That link is not taking you to the place that is referenced. They may have taken it down or changed the landing page for the link, however, you can use the links about the interest income for Massachusetts (MA).
(A) Interest and dividends from savings deposits, including term and time deposits having a principal amount of less than one hundred thousand dollars, savings accounts, share or share savings accounts in any savings or cooperative bank, trust company or credit union incorporated in or chartered by the commonwealth; in any national bank, federal savings and loan association, federal savings bank or federal credit union located in the commonwealth; in any banking company or Morris Plan company subject to chapter one hundred and seventy-two A; in any savings or loan association or banking partnership under the supervision of the commissioner of banks.
What about having a principal amount of LARGER than one hundred thousand dollars?
How and where does a bank's 1099-INT state such an amount? or would the bank report the earning and principal with a different form?
Thanks
Is Capital One Bank considered a Massachusetts bank, since they have Capital One Cafes?
No it is not listed on the current MA Bank List. In addition, many people fail to realize the full rules for a money market account, found here.
According to this doc from the Mass Department of Revenue: https://www.mass.gov/info-details/massachusetts-personal-income-tax-exemptions
Effective for taxable years beginning on or after January 1, 2024, the deduction previously allowed for a deduction of up to $100 ($200 for joint filers) of interest from Massachusetts banks is repealed.
How do you get the deduction. Where does it even ask if it's a money market account or a checking account?
The bank interest was repealed for TY 24. See Learn about the filing requirements for dividends and interest.