Massachusetts has a flat 5% income tax with an additional 4% surtax on income over $1 million — resulting in a 9% top rate for high earners.
Massachusetts Tax Rates 2026
| Income Level | Tax Rate |
|---|---|
| Up to $1,000,000 | 5% |
| Over $1,000,000 | 9% (5% + 4% surtax) |
The 4% surtax (known as the “Millionaire’s Tax” or Fair Share Amendment) was approved by voters in 2022 and applies to taxable income exceeding $1 million annually.
How Much Will I Pay in Massachusetts Tax?
| Taxable Income | Massachusetts Tax | Effective Rate |
|---|---|---|
| $50,000 | $2,500 | 5.0% |
| $75,000 | $3,750 | 5.0% |
| $100,000 | $5,000 | 5.0% |
| $150,000 | $7,500 | 5.0% |
| $250,000 | $12,500 | 5.0% |
| $500,000 | $25,000 | 5.0% |
| $1,000,000 | $50,000 | 5.0% |
| $1,500,000 | $70,000 | 4.67% |
| $2,000,000 | $90,000 | 4.5% |
Note: $1.5M income = $50,000 (5% on first $1M) + $20,000 (9% on $500K) = $70,000 total
Massachusetts Deductions
Massachusetts doesn’t use the federal standard deduction. Instead, it offers:
Personal Exemptions
| Filing Status | Exemption Amount |
|---|---|
| Single | $4,400 |
| Married Filing Jointly | $8,800 |
| Each Dependent | $1,000 |
| Age 65+ | Additional $700 |
| Blind | Additional $2,200 |
Itemized Deductions Allowed
- Mortgage interest (on first $750,000 of debt)
- Charitable contributions
- Child care expenses
- Medical/dental expenses (above 7.5% of AGI)
- Student loan interest (up to $2,500)
Deductions NOT Allowed
- State and local taxes (SALT)
- Investment interest
- Miscellaneous itemized deductions
Massachusetts Capital Gains
Massachusetts taxes capital gains differently based on holding period:
| Holding Period | Tax Rate |
|---|---|
| Short-term (under 1 year) | 8.5% |
| Long-term (1+ years) | 5% |
| Collectibles | 5% |
Short-term gains face a higher 8.5% rate, incentivizing longer holding periods.
Massachusetts vs. Other States
| State | Top Rate | Type |
|---|---|---|
| Massachusetts | 9%* | Flat + surtax |
| New York | 10.9% | Progressive |
| Connecticut | 6.99% | Progressive |
| Rhode Island | 5.99% | Progressive |
| New Hampshire | 0%** | No income tax |
| California | 13.3% | Progressive |
**9% applies to income over $1M; *NH has no tax on wages but taxes interest/dividends
Massachusetts Retirement Income
| Income Type | Tax Treatment |
|---|---|
| Social Security | Fully exempt |
| 401(k), IRA distributions | Taxed at 5% |
| Massachusetts state pension | Fully exempt |
| Federal government pension | Taxed at 5% |
| Private pension | Taxed at 5% |
Social Security exemption is helpful, but private retirement income faces the full 5% rate.
Massachusetts Tax Credits
| Credit | Maximum |
|---|---|
| Earned Income Tax Credit | 40% of federal EITC |
| Child and Family Tax Credit | $440/child (ages 0-12) or $180/dependent (13+) |
| Senior Circuit Breaker | Up to $2,640 |
| Dependent Care Credit | $360/$720 |
| Commuter Deduction | Up to $750 |
Massachusetts EITC
Massachusetts offers 40% of the federal EITC — one of the most generous state matches.
| Federal EITC | Massachusetts EITC |
|---|---|
| $500 | $200 |
| $1,000 | $400 |
| $5,000 | $2,000 |
| $7,430 (max) | $2,972 |
Who Must File a Massachusetts Tax Return?
You must file if:
- Gross income exceeds $8,000 (or lower thresholds for dependents)
- You’re required to file a federal return
- You want to claim a refund
Massachusetts Sales Tax
| Tax Type | Rate |
|---|---|
| State sales tax | 6.25% |
| Local sales tax | None |
| Meals tax | Up to 7% |
Massachusetts has no local sales tax, so 6.25% applies statewide.
Massachusetts Property Tax
| Metric | Amount |
|---|---|
| Average effective rate | 1.14% |
| Median home value | $540,000 |
| Median property tax | $6,156 |
Massachusetts property taxes are above the national average and significantly higher in wealthy suburbs like Newton and Wellesley.
How to File Massachusetts Taxes
| Method | Cost | Best For |
|---|---|---|
| Mass.gov Free File | $0 | AGI < $79,000 |
| MassTaxConnect | $0 | All taxpayers |
| Commercial software | $0-$60 | Complex returns |
| Tax professional | $150-$500 | Business owners |
Filing deadline: April 15 (Massachusetts gives automatic extension if federal extension is filed)
Massachusetts Tax Strategies
1. Time Income Around $1 Million
If you’re near the $1M threshold, consider deferring income or accelerating deductions to avoid the 4% surtax.
2. Maximize Retirement Contributions
Pre-tax 401(k) and IRA contributions reduce your Massachusetts taxable income at the 5% rate.
3. Claim the EITC
Massachusetts’s 40% match makes the state EITC valuable — don’t leave money on the table.
4. Senior Circuit Breaker Credit
Seniors 65+ with property taxes exceeding 10% of income may qualify for up to $2,640.
5. Hold Investments Long-Term
Short-term gains face 8.5% vs. 5% for long-term — a significant difference.
Massachusetts Part-Year and Nonresident Rules
| Status | What’s Taxed |
|---|---|
| Full-year resident | All income |
| Part-year resident | All income during residency + MA-source income |
| Nonresident | Only MA-source income |
Key Takeaways
- Massachusetts has a flat 5% rate with a 4% surtax on income over $1M
- Social Security is exempt from state tax
- State pension income is also fully exempt
- Short-term capital gains face a higher 8.5% rate
- 40% state EITC match is among the most generous in the country
- No local income taxes — the state rate applies everywhere
- Property taxes are high — budget $5,000-$10,000+ annually in metro Boston