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
For a side-by-side comparison of every state’s income tax rates, see state income tax rates by state 2026 and best and worst states for taxes 2026. Federal income tax applies on top of state taxes — see 2026 federal income tax brackets to calculate your combined liability.
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