Schedule SC: Septic Credit for Repairing or Replacing a Failed Cesspool or Septic System (2025)

Who files this form

Complete and enclose Schedule SC with your Massachusetts income tax return if you are claiming the Septic Credit.

To qualify, you must:

• Own residential property in Massachusetts, meaning you hold legal title.
• Occupy the property as your principal residence, generally where you live most of the time.
• Not be someone another taxpayer may claim as a dependent on a 2025 Massachusetts income tax return.

Co-owners who meet these requirements may claim a share of the credit based on the actual costs each paid, subject to the credit limits.

What you'll need

Have the following information and records available:

• A copy of the Certificate of Compliance or verification letter, its issue date, and the approving authority’s name. Keep the copy with your records.
• Descriptions of the work, payment dates, actual costs, and grants or reimbursements received. Complete expenditure details must be available on request.
• Names, addresses, and ownership percentages of co-owners. For a condominium, provide the association’s legal name and total number of owners.
• Your 2024 Schedule SC if you are claiming an unused credit carried forward from that return.

If you received a Commonwealth interest subsidy, retain the lender’s truth in lending statement or similar document showing the lender, loan amount, interest rate, repayment term, and amount repaid. For a municipal betterment, retain property tax bills or municipal documents showing the corresponding betterment details.

How to file

• Complete Schedule SC and enclose it with your Massachusetts income tax return.
• Complete Part 2 only if your Certificate of Compliance or verification letter was issued in 2025.
• Complete Part 4 if line 7 is more than line 13 or you have unused credits from prior years.
• If you are claiming a carryforward for a certificate or letter issued in 2022 or earlier and received a qualifying subsidized loan or municipal betterment, complete line 3 and the applicable lines in Part 5.
• Enter the allowable credit from line 13 on Schedule CMS.

If you moved during the tax year and had more than one qualifying principal residence, file a separate Schedule SC for each residence. The combined credits cannot exceed $4,000.

The supplied text does not give a mailing address or e-filing directions.

Common mistakes

• Leaving out Schedule SC. The form warns that failing to enclose it with your return will cause the credit to be disallowed and your reported tax to be adjusted.
• Using a PO box for the property address. Enter the street address of the Massachusetts principal residence with the failed system.
• Not keeping the compliance document. Retain a copy of the Certificate of Compliance or verification letter.
• Ignoring other credits when completing line 12. Reduce the tax amount by the Limited Income Credit, Credit for Taxes Paid to Other Jurisdictions, and other applicable credits.
• Overlooking credit expiration. The instructions note that it is more advantageous to use credits that expire first.

Questions people ask

How much is the credit for a certificate or letter issued in 2025?

The calculation uses 60% of eligible actual costs, limited to $30,000 of costs. The total credit limit is $18,000, with no more than $4,000 claimable in a tax year. Ownership share, any applicable interest subsidy, and the tax amount on line 12 can further limit the current-year credit.

What costs count?

Actual costs include reasonable and necessary costs for materials, equipment, demolition, relocation, design, engineering, testing, and inspection, reduced by grants and reimbursements. The instructions also cover repairs, replacements, upgrades, or sewer connections required by Title 5 or a Department of Environmental Protection watershed permit. Replacement landscaping is excluded.

Can I include costs paid before 2025?

Yes. The form says to include actual costs incurred in 1995 through 2024. Complete Part 2 only if the Certificate of Compliance or verification letter was issued in 2025.

Can I carry unused credit forward?

Yes. Excess credit may be used in the five tax years following the year it was initially claimed. For a certificate or verification letter issued in 2022 or earlier, the maximum carryover credit claimable in a tax year is $1,500.

Official sources

• https://www.mass.gov/lists/dor-tax-forms-and-instructions