Massachusetts Tax Tables Tax Rates and Thresholds in Massachusetts

Upon receiving your paycheck, you’ll first notice your gross pay—the earnings you’ve made before any deductions. However, several components will reduce this amount, resulting in your net pay. Let’s delve into these aspects and discover where your hard-earned money goes. One other tax also exists in the form of a paid family and medical leave (pfml) insurance tax.

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• The EITC rates and thresholds are adjusted annually to reflect changes in the economy and cost of living.
• As a refundable credit, the EITC not only reduces the amount of tax owed but can also result in a refund if the credit exceeds the taxpayer’s total tax liability.
• Income that is exempt from Massachusetts tax, such as interest on federal and Massachusetts obligations, is not included in the 4% surtax determination.
• Let’s delve into these aspects and discover where your hard-earned money goes.
• With the exception of the Medicare surtax, your employer will match your FICA tax payment and contribute as well.
• To determine the amount of tax you’ll need to pay, make sure to include any deductions you are eligible for.

The standard 5% tax rate remains unchanged, but the MA millionaire tax, introduced in 2023, continues to impact high earners. This tax applies to all income exceeding $1 million, regardless of filing status, effectively increasing the overall tax rate for high-income individuals. Unlike states that adjust brackets based on inflation, Massachusetts has maintained its flat tax rate for decades, with few adjustments. This page shows Tax-Brackets.org’s archived Massachusetts tax brackets for tax year 2021. This means that these brackets applied to all income earned in 2021, and the tax return that uses these tax rates was due ma tax bracket in April 2022. The Earned Income Tax Credit (EITC) is a significant tax credit in the United States, designed primarily to benefit working individuals and families with low to moderate income.

Federal Ordinary Income Tax Rates for 2025

The average property tax rate in Massachusetts is 1.04 percent, according to the Tax Foundation.Learn more about property tax in Massachusetts. People who are blind, seniors, surviving spouses and veterans, as well as anyone who claims the Bay State as their primary residence,  may qualify for local property tax exemptions. Personal property such as cars and boats are typically taxed locally through excise taxes. The Federal income tax also has a standard deduction, personal exemptions, and dependant deductions, though they are different amounts than Massachusetts’ and may have different rules.

Federal Married (separate) Filer Tax Tables

For surtax threshold amounts by tax year, go to Calculating Income Subject to the 4% Surtax on this page. Income from most private cash flow pensions or annuity plans is taxable in Massachusetts but many government pensions are exempt. Withdrawals from a traditional IRA are taxable but the Massachusetts taxable amount may be different from the federal taxable amount. You can also include, in medical expenses, part of monthly or lump-sum life-care fees or “founder’s fees” you paid to a retirement home under the agreement. Residents – Include gross income from all sources, both in and out of Massachusetts. There are two ways to be considered a full-time resident of Massachusetts.

Massachusetts income tax rate

Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 24 percent of combined state and local tax collections. Massachusetts has a 27.37 cents per gallon gas tax rate and a $3.51 cigarette excise tax rate. The State of Massachusetts collects $8,110 in state and local tax collections per capita. Massachusetts has $14,534 in state and local debt per capita and has a 69 percent funded ratio of public pension plans.

• This tax is progressive, which means the tax rate you pay — the percentage of each additional dollar that goes to the government — increases as your income increases.
• This breakdown will include how much income tax you are paying, state taxes, federal taxes, and many other costs.
• Aside from income tax, another federal withholding that applies to most workers in Massachusetts is Social Security tax.
• Complete and e-File your Massachusetts Income Tax Return on eFile.com along your Federal Tax Return.
• Once the extension is granted, the 6-month extension starts at the filing due date of the original return.
• This extension covers filing tax returns, paying tax (including estimated tax), and filing tax extension forms with us.

Qualifying deductions might include an itemized deduction, the Massachusetts standard deduction, exemptions for dependants, business expenses, etc. Most refunds are claimed on an original return and will be issued automatically by the Department. For e-filed returns the turnaround time is about 6 weeks; but for paper returns it could take up to 10 weeks.

Veterans Administration disability compensation is also not taxed in the state.Spouses of military personnel may be eligible for exemptions. High earners, self-employed individuals, property owners, and investors face the highest tax burdens in the state. Strategies include income deferral, charitable donations, trust planning, and potential relocation to a lower-tax state. Next, check what income you included in your Massachusetts gross income that you’re supposed to deduct on the appropriate Schedule, and then deduct the income. The state extension deadline follows the federal extension deadline set by the IRS, which is Oct. 15, 2025. Keep in mind that being granted a federal tax extension does not grant you a state tax extension in Massachusetts.

How to file Massachusetts state income tax

State residents who would like to contribute more to the state’s coffers also have the option to pay a higher income tax rate. Boston Harbor may Record Keeping for Small Business be the site of the most famous tax protest in history, but today Bay Staters pay taxes on a lot more than tea. The most significant taxes in Massachusetts are the sales and income taxes, both of which consist of a flat rate paid by residents statewide. While the state sales tax of 6.25% is among the nation’s highest, there are no local sales taxes levied in Massachusetts. The Tax tables below include the tax rates, thresholds and allowances included in the Massachusetts Tax Calculator 2024.

Tax planning is a strategic approach designed to reduce a person’s (or a company’s) tax liability by leveraging various tax benefits and allowances. It’s about understanding the tax implications of your financial decisions, so you can minimize your taxes and, ultimately, keep more of your hard-earned money. That might involve making investments that offer tax benefits, choosing the right type of retirement account, taking advantage of deductions and credits, or investing in a tax-advantaged account. Let’s consider an individual who has a taxable income of $350,000 in Massachusetts state. This individual would qualify for the $4,400 standard deduction, reducing his or her taxable income to $345,600, putting them in the 9% tax bracket. Income taxes are taxes imposed on individuals or entities that earn income.