Quick answer: The Massachusetts septic tax credit covers 40% of qualifying costs to repair or replace a failed system at your principal residence, up to $1,500 per year and $6,000 total. Many towns also offer low-interest betterment loans repaid through your property tax bill.
The septic tax credit (Schedule SC)
- Who qualifies: owners repairing or replacing a failed cesspool or septic system at the home they own and occupy as their principal residence. Voluntary upgrades of a working system generally don't qualify.
- Amount: 40% of qualifying costs, capped at $1,500 in any tax year and $6,000 total. To get the full $6,000 you'd spend $15,000 or more.
- How to claim: file Massachusetts Schedule SC with your state return for the year the work is completed, and keep the Certificate of Compliance.
- Carryforward: credit you can't use in one year carries forward to later years. Check the current Schedule SC instructions for the exact rules.
Town betterment loans
Through MassDEP's Community Septic Management Program, participating towns lend homeowners money at low interest to fix failed systems. You repay it through a betterment on your property tax bill, often over many years. Ask your Board of Health whether your town participates.
Other options
- MassHousing septic loan program: low-interest loans for eligible homeowners. Check current income limits and terms with MassHousing.
- Home sale negotiation: if you're selling, a credit or escrow can shift the cost. See failed Title 5 inspection.
This page is general information, not tax advice. Confirm eligibility with a tax professional or the Massachusetts DOR (see TIR 97-12 and the current Schedule SC).
Related guides
Frequently asked questions
Is the Massachusetts septic tax credit refundable?
No. It reduces the state income tax you owe. Any amount you can't use in a year carries forward under the Schedule SC rules.
Does the credit apply to a rental or vacation home?
No. It applies only to the principal residence you own and occupy.
Can I claim both the tax credit and a betterment loan?
Generally yes. The loan pays for the work, and the credit is based on your qualifying expenditures. Confirm the details with a tax professional.
Last reviewed 2026-11-09. Regulations and prices change. Confirm details with your local Board of Health and your contractor.