Massachusetts Business Trusts
Recent Massachusetts Tax Law Changes How They Are Utilized         

Massachusetts recently adopted federal "check the box" entity classification rules.   Under the previous rules, business entities, including Massachusetts Business Trusts, sometimes had different classifications for federal and state purposes.  Technical Information Release 08-11: An Act Relative to Tax Fairness and Business Competiveness repeals the separate taxation provisions that formerly applied to Massachusetts Business Trusts.

For tax years beginning on or after January 1, 2009, the filing status for business entities in Massachusetts must conform to their filing status for federal tax purposes.  For tax years described above, there will be no separate corporate trust tax classification and no corporate trust returns.  Businesses previously taxed in Massachusetts as corporate trusts will be treated either as corporations (filing corporate returns), as partnerships (filing partnership returns), or as disregarded entities (filing no returns separate from the return of a sole shareholder or member), depending on the federal treatment elected by the entity.

The most recent changes in Massachusetts tax law provide an opportunity to simplify income tax filings at both the pass through entity and shareholder level as Form 3F Income Tax Return of Corporate Trust will no longer be filed.  Instead, all items of income and loss will flow through to each shareholder in the form of a Massachusetts Schedule K-1.

This law change may affect your schedule 2009 estimated tax payment. Please contact Feeley & Driscoll's Boston Accounting team by Email or call 1 (888) 875-9770 to review your estimated taxes if you are uncertain about these rules.

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