Millionaire's Tax among new laws and changes for 2023
BOSTON - A new year means some new laws and changes go into effect in 2023, impacting Massachusetts at both the state and federal level. Here's a few you should know about.
MINIMUM WAGE HIKE
The Massachusetts minimum wage is increasing to start 2023, and there are other changes coming for workers in the new year.
The minimum wage will be $15 an hour starting January 1, up from $14.25. The service rate will go from $6.15 an hour to $6.75.
Time-and-a-half pay on Sundays and holidays will be eliminated completely in 2023 after years of being phased out.
MILLIONAIRE'S TAX
On Jan. 1, a new law kicks in that will increase taxes on those earning more than $1 million a year.
The "millionaire tax" constitutional amendment imposes a 4% surtax on the portion of an individual's annual income that exceeds $1 million. Those making up to $1 million, but not exceeding that amount, won't pay new taxes.
Supporters say the new tax will generate about $2 billion in annual revenue that could be used for education and transportation. Opponents, including business groups, have warned the change will cost jobs while driving away some of the state's wealthiest citizens.
NEW EV TAX CREDIT
Starting Jan. 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle. The credit, part of changes enacted in the Inflation Reduction Act, is designed to spur EV sales and reduce greenhouse emissions.
But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, is casting doubt on whether anyone can receive the full $7,500 credit next year.
For at least the first two months of 2023, though, a delay in the Treasury Department's rules for the new benefit will likely make the full credit temporarily available to consumers who meet certain income and price limits.
The new law also provides a smaller credit for people who buy a used EV.
Click here to read more about the credit.
SOCIAL SECURITY COLA INCREASE
Social Security recipients will soon receive their biggest benefit hike since 1981, with the pension program set to deliver an 8.7% cost-of-living increase in 2023.
The annual cost-of-living adjustment, or COLA, takes effect with the December benefits, but those payments will reach most recipients in January 2023, according to the Social Security Administration. With the increase, the average benefit check will rise more than $140 to $1,827 a month, compared with the typical benefit of $1,681 in 2022.
The Social Security Administration adjusts payments annually based on the inflation rate, which this year has spiked to its highest levels in four decades. Seniors lost purchasing power during this year since the 5.9% they received in 2022 is well below this year's rise in prices — overall, the average Social Security benefit fell short of inflation by more than $500 this year, according to a calculation by the advocacy group the Senior Citizens League.
Click here to read more.