What’s Changing in Massachusetts (
Sub-Region Note: Massachusetts)
Massachusetts has formally adopted Technical Information Release 26-4 (TIR 26-4), clarifying how the state will conform—or not conform—to certain provisions of Public Law 119-21, also known as the One Big Beautiful Bill Act (OBBBA). The changes were published June 23, 2026 and impact corporate and income tax purposes. (mass.gov)
Key Decoupling & Decideried Differences
- R&D (domestic research and experimental) expenses paid or incurred between January 1, 2022 and January 1, 2025 must be amortized over 5 years under state law—even if federal law allows more favorable treatment or transition rules under P.L. 119-21. (mass.gov)
- Qualified Opportunity Zone rules under IRC § 1400Z-2: Massachusetts does not adopt federal renewals and modifications for taxable years 2025–2026. Investments in zones not in Massachusetts will require add-backs. (mass.gov)
Impact & Considerations for Businesses
- Businesses with R&D spend during 2022–2024 need to amend projections—corporate tax filings in Massachusetts must reflect amortization, not immediate deduction. This can increase taxable income in earlier years.
- Investors in Opportunity Zones should verify that their investments are entirely within Massachusetts if they want state-level tax benefits. Investments outside the state lose exclusion under state law. (mass.gov)
- Underpayments or late filings for 2025 tax year may be eligible for relief if obligations are tied to the state’s conformity to federal OBBBA provisions. Specific schedules and disclosure statements are required. (mass.gov)
Practical Examples
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Tech Startup: Incorporated in Massachusetts; $200,000 of R&D expended in 2023. Under federal law, amortization or immediate expensing (depending on rules) may be favorable—but for Massachusetts filings, that $200,000 must be spread over five years beginning 2022.
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Opportunity Zone Investor: Jane invests in an OZ fund with projects in Texas. Even though federal benefits apply, for MA tax return she must add back any exclusion claimed due to project being outside the state.
Action Steps for Businesses
- Adjust tax planning and cash flow models to account for increased taxable income earlier than expected.
- Ensure tax software or preparers are updated with Massachusetts’ non-conformity rules under TIR 26-4.
- For 2025 returns, attach required schedules (M-2210F, TDS disclosures) if applying for penalty relief due to the conformity lag. (mass.gov)
- Monitor whether further state legislation bridges gaps between federal and state treatments.
Massachusetts’ deviation from federal norms underlines the importance of checking both state and federal tax laws in tandem—especially for deductions like R&D and OZ investments that often cross boundaries.