Massachusetts Estate Taxes

Who Must File, and How Is It Done?

In Massachusetts, the Commonwealth collects an estate tax when a person dies in some situations. This is separate from any taxes the federal government will collect.

Massachusetts is among one of several states that still assesses separate estate taxes on certain property when a person dies.

For deaths that occurred on or after January 1, 2006, the executor of the estate must file a Massachusetts Estate Tax Return (Form M-706) if the gross value of the estate (plus adjusted tax gifts) exceeds $1,000,000.

Who is Considered An Executor For Purposes of The Massachusetts Estate Tax?

Under Massachusetts estate tax law, the term "executor" is defined as the executor or administrator of the decedent, or if there is no executor or administrator appointed, qualified and acting within the Commonwealth, then any person in actual or constructive possession of any property of the decedent.

Can I Get An Extension Of Time To File?

Maybe. You'll need to submit an "Application for Extension of Time to File Massachusetts Estate Tax Return" (Form M-4768). Typically an extension of time to file may be granted for a reasonable period, provided the application is made on or before the due date and 100 percent of the estimated amount of tax is paid.

If you failure to pay at least 80 percent of the amount of tax finally determined to be due on or before the due date, any extension of time to file might be voided, and the return will be subject to the late filing penalty and, possibly, a late payment penalty. Interest is due on any unpaid tax from the original due date.

Penalty For Late Filings or Payment

If the executor doesn't file a required estate tax return return within nine (9) months from the date of death or within an approved period of extension, he or she will have to pay a penalty. Here is the rate:

1. Late Filing Penalty - 1 percent per month (or fraction thereof) to a maximum of 25 percent of the tax as finally determined to be due.
2. Late Payment Penalty - 1 percent per month (or fraction thereof) to a maximum of 25 percent of the tax reported as due on the return.

See Probate Court, State Probate Courts, Avoiding Probate, and Planning an Estate for more information.

Massachusetts tax laws can be tricky. Please consider contacting a local tax attorney who can help you better understand the current rules and procedures.