What’s in Massachusetts’ $1 billion tax relief package for you?

Senate President Karen E. Spilka and House Speaker Ronald J. Mariano unveiled a $1 billion tax relief deal on Tuesday.Pat Greenhouse/Globe Staff

Massachusetts lawmakers will begin voting Wednesday on a $1 billion tax relief package that would boost tax breaks for families, seniors, renters, and others while slashing how much the state taxes profits on short-term investments.

The package would save hundreds of thousands of taxpayers a collective $561 million this fiscal year, with expectations that the total savings would eventually climb to just over $1.02 billion once it goes into full effect in fiscal year 2027, according to legislative officials.

Some key elements of the proposal are:

Estate Tax

The bill would reshape the state’s estate tax by hiking the threshold at which the tax kicks in from $1 million to $2 million. The legislation also would offer a tax credit that seeks to offset the so-called “cliff effect,” where an entire estate is taxed once it hits the threshold, not just the amount over it.

Earned Income:

The bill would increase the state’s earned income tax credit — designed to help low-income families — from 30 percent to 40 percent of the federal credit. It would also double and index to inflation the maximum senior circuit breaker tax credit, and increase the cap on the rental deduction from $3,000 to $4,000.

Child and Dependents:

The bill also would create a generous universal child and dependent tax credit by combining two existing tax credits for child care and dependent care into one. The credit would allow taxpayers to claim $310 per dependent in the first year of implementation. The size of the new credit would jump to $440 per dependent in the second year and beyond.

Seniors, Renters:

The bill also would double the tax credit for seniors who rent or own in Massachusetts from $1,200 to $2,400. The bill would raise the deduction for renters from $3,000 to $4,000.

Low Income Housing:

The bill aims to incentivize new housing production by expanding the Housing Development Incentive Program, which would rise from $10 million to $57 million in the first year and then settle at $30 million annually thereafter, and increasing the annual authorization for the Low Income Housing Tax Credit from $40 million to $60 million.

Multistate Companies:

The bill would overhaul how Massachusetts calculates taxes owed by multistate companies. Currently, the apportionment system factors in property, payroll and sales, and the bill would replace that with a simplified version that uses only a company’s sales.

Material from State House News Service was used in this report.