Massachusetts tax brackets are simpler than the federal system: most income is taxed at a flat 5%, and a 4% surtax applies to taxable income above an inflation-adjusted threshold that sits at $1,083,150 for tax year 2025.1Massachusetts Department of Revenue. Massachusetts Tax Rates That means high earners pay a combined 9% on income above the threshold. Short-term capital gains are taxed separately at 8.5%, and several exemptions, deductions, and credits can reduce what you actually owe.
The Flat 5% Rate on Most Income
Unlike the federal system with its graduated brackets, Massachusetts applies a single 5% rate to most income.2General Court of Massachusetts. Massachusetts Code Chapter 62 – Taxation of Incomes Wages, salaries, tips, bonuses, interest, dividends, and long-term capital gains all fall under this rate.3Massachusetts Department of Revenue. Personal Income Tax for Residents Whether you earn $50,000 or $500,000, the percentage on each dollar of taxable income stays the same.
The 5% rate applies after you subtract personal exemptions and eligible deductions from gross income, so your effective rate on total earnings is lower than 5%.
The 4% Surtax Above $1,083,150
Starting with tax year 2023, the Fair Share Amendment added a second tier. Any taxable income above the surtax threshold is hit with an extra 4% on top of the standard 5%, bringing the rate on that portion to 9%.4Massachusetts Department of Revenue. Massachusetts 4% Surtax on Taxable Income The threshold began at $1,000,000 in 2023 and adjusts upward each year. For 2025 it’s $1,083,150.1Massachusetts Department of Revenue. Massachusetts Tax Rates
The surtax applies only to the amount above the line, not the entire income. Someone with $1,283,150 in taxable income in 2025 would owe the extra 4% only on the $200,000 above the threshold, adding $8,000. It applies to your total taxable income from all sources combined, including capital gains, so a one-time windfall from selling a business or property can push an otherwise middle-income taxpayer over the line for that year.
Capital Gains Rates
How Massachusetts taxes your investment profits depends on how long you held the asset. Long-term gains on assets held more than one year are taxed at the standard 5% rate. Short-term gains on assets held one year or less are taxed at 8.5%.1Massachusetts Department of Revenue. Massachusetts Tax Rates The gap creates a real incentive to hold investments past the one-year mark.
The statute also sets a 12% rate for certain less common categories of capital gains classified as Part A income that don’t qualify for the 8.5% short-term rate.2General Court of Massachusetts. Massachusetts Code Chapter 62 – Taxation of Incomes For most individuals selling stocks or real estate, the relevant rates are 8.5% short-term and 5% long-term. Keep records of purchase and sale dates, because the Department of Revenue defaults to the higher rate if you can’t prove the holding period.
Personal Exemptions
Before any rate applies, you reduce your gross income by the personal exemption tied to your filing status:5Massachusetts Department of Revenue. Massachusetts Personal Income Tax Exemptions
- Single or married filing separately: $4,400
- Head of household: $6,800
- Married filing jointly: $8,800
Each qualifying dependent adds $1,000. Massachusetts is more generous than the federal system on this point: you can claim the dependent exemption even if the dependent files their own return.5Massachusetts Department of Revenue. Massachusetts Personal Income Tax Exemptions
Additional exemptions apply if you’re 65 or older ($700) or legally blind ($2,200), and both spouses on a joint return can claim these if each qualifies.6Massachusetts Department of Revenue. Massachusetts Tax Information for Seniors and Retirees Massachusetts uses December 31 as the cutoff for the age exemption, not January 1 as under federal rules.
Deductions That Lower Taxable Income
Rent Deduction
If you rent your primary residence in Massachusetts, you can deduct 50% of your annual rent up to a maximum of $4,000.7Mass.gov. Deductions on Rent Paid in Massachusetts Married couples filing separately are each capped at $2,000, though spouses can allocate the deduction differently as long as the combined total doesn’t exceed $4,000. Part-year residents and nonresidents can claim it too, as long as the rental is in Massachusetts and serves as their principal residence.
Commuter Deduction
You can deduct qualifying commuting costs that exceed $150 per year, up to $750 per person, or $1,500 on a joint return.8Massachusetts Department of Revenue. Massachusetts Commuter Tax Deduction, Income Exclusion, and Pre-Tax Savings Eligible expenses include MBTA and regional transit fares, E-ZPass tolls, commuter rail and boat passes, bikeshare memberships, and bicycle purchases and repairs. Amounts your employer reimburses or covers through pre-tax benefits must be subtracted first.
Credits for Lower-Income Residents
Because the rate is flat, Massachusetts doesn’t build progressivity into the brackets themselves. Two credits do the work instead.
No-Tax Status and Limited Income Credit
If your adjusted gross income falls below certain thresholds, you owe nothing. Single filers with AGI under $8,000, heads of household under $14,400, and joint filers under $16,400 qualify for no-tax status. Head of household and joint filers add $1,000 to those limits for each dependent. Above those cutoffs, a limited income credit phases out gradually, with AGI ceilings of $14,000 (single), $25,200 (head of household), and $28,700 (joint).9Massachusetts Department of Revenue. Massachusetts No Tax Status and Limited Income Credit
Earned Income Tax Credit
Massachusetts offers a state EITC equal to 40% of the federal credit. It’s refundable, so it can generate a refund even when you owe no state tax. You must qualify federally first; the state credit is calculated automatically from the federal amount.
Retirement Income
Massachusetts does not tax Social Security benefits. Income from private pensions and traditional IRA withdrawals is generally taxable at the standard 5% rate, and many government pensions are exempt.6Massachusetts Department of Revenue. Massachusetts Tax Information for Seniors and Retirees If you contributed to a retirement plan with after-tax dollars, the Massachusetts taxable amount on withdrawals may differ from the federal taxable amount.
Seniors 65 and older may also qualify for the Circuit Breaker credit, a refundable credit tied to the real estate taxes or rent paid on a Massachusetts home when those costs are disproportionate to income.10Massachusetts Department of Revenue. Massachusetts Senior Circuit Breaker Tax Credit
When You Have to File
You must file a Massachusetts personal income tax return if your gross income is $8,000 or more for the year.3Massachusetts Department of Revenue. Personal Income Tax for Residents For tax year 2025 the return is due April 15, 2026. A federal extension does not extend your Massachusetts return; the state requires its own.
Massachusetts grants an automatic six-month extension to file, but only if you’ve paid at least 80% of your total tax liability by April 15.11Massachusetts Department of Revenue. File an Extension and Pay MA Personal Income, Fiduciary, or Partnership Tax An extension to file is not an extension to pay. Interest accrues on unpaid balances from the original due date. If you owe nothing, you’re automatically extended to October 15 without needing to file anything.