State Income Tax

Income Tax in Massachusetts: Complete Guide 2026

Updated 2026-03-10

Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.

Income Tax in Massachusetts: Complete Guide 2026

Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.

Massachusetts imposes a flat-rate income tax of ~5.00% on most types of income, plus an additional ~4.00% surtax on annual income exceeding ~$1,000,000, bringing the effective top rate to ~9.00% for the state’s highest earners. Known as the “millionaire’s tax” or “Fair Share Amendment,” this surtax was approved by voters in 2022 and took effect for tax year 2023. Massachusetts does not levy local income taxes, so these state rates represent the full income tax burden.

Massachusetts Income Tax Rates (2026)

Income LevelRate
All taxable income up to ~$1,000,000~5.00%
Income exceeding ~$1,000,000~9.00% (5.00% + 4.00% surtax)

Tax on Different Income Types

Income TypeRate
Wages and salary~5.00%
Interest and dividends~5.00%
Short-term capital gains~8.50%
Long-term capital gains~5.00%
Income over ~$1,000,000 (all types)Additional ~4.00%

Massachusetts applies a higher rate to short-term capital gains (assets held one year or less) at ~8.50%, while long-term gains are taxed at the standard ~5.00% rate.

How Massachusetts Income Tax Works

Flat Tax with Surtax

For the vast majority of filers, Massachusetts functions as a simple flat-tax state at ~5.00%. The millionaire’s surtax adds ~4.00% only on the portion of income exceeding ~$1,000,000 in a given year. This threshold is indexed for inflation and applies to all filing statuses.

Exemptions and Deductions

Massachusetts does not use the federal standard deduction. Instead, it offers its own set of exemptions:

Exemption TypeAmount
Personal exemption (single)~$4,400
Personal exemption (married jointly)~$8,800
Dependent exemption (per dependent)~$1,000
Age 65+ additional exemption~$700
Blind additional exemption~$2,200

Massachusetts also allows several specific deductions:

  • Rent deduction: ~50% of rent paid, up to ~$3,000
  • Commuter deduction: Actual transit costs up to ~$750
  • Student loan interest: Up to ~$2,500
  • Child under 13 or disabled dependent care: Up to ~$3,600 (one dependent) or ~$4,800 (two or more)

No-Tax Status

If your Massachusetts AGI is at or below certain thresholds, you owe no state income tax. For 2026, the no-tax threshold is approximately ~$8,000 for single filers and ~$16,400 for joint filers.

Key Massachusetts Tax Credits

  1. Earned Income Credit: Massachusetts offers a refundable EITC equal to ~40% of the federal credit, one of the most generous state matches.
  2. Child and Dependent Care Credit: A credit based on qualifying care expenses for children under 13 or disabled dependents.
  3. Senior Circuit Breaker Credit: Homeowners and renters age 65+ with income under ~$68,000 (single) or ~$102,000 (joint) can claim a refundable credit up to ~$2,590 for property taxes or rent paid.
  4. Renewable Energy Credit: Credits for qualifying solar, wind, and energy efficiency installations.
  5. Lead Paint Removal Credit: Up to ~$1,500 for removing lead paint from residential properties.

Who Must File in Massachusetts

You must file a Massachusetts return (Form 1) if:

  • You are a resident with income exceeding the no-tax threshold
  • You are a part-year resident with Massachusetts-source income
  • You are a nonresident who earned income in Massachusetts
  • You want to claim a refund of Massachusetts withholding

The filing deadline is April 15.

Comparison to National Average

StateStandard RateTop RateSurtax Threshold
Massachusetts~5.00%~9.00%~$1,000,000
Connecticut~3.00%~6.99%~$500,000
New York~4.00%~10.90%~$25,000,000
New Hampshire0% (wages)0%N/A
Rhode Island~3.75%~5.99%~$176,050
National average~4.60%VariesVaries

Massachusetts’s flat rate of ~5.00% is slightly above the national average, but the ~9.00% effective rate on high earners places it among the states with the steepest top-bracket taxes.

Tips for Minimizing Massachusetts Income Tax

  1. Claim the rent deduction. Renters can deduct ~50% of rent paid up to ~$3,000, a benefit unique to Massachusetts.

  2. Maximize the state EITC. At ~40% of the federal credit, Massachusetts’s earned income credit is among the largest state-level matches.

  3. Use the Senior Circuit Breaker. Seniors with moderate incomes should always check eligibility for this refundable credit of up to ~$2,590.

  4. Hold investments long-term. Short-term capital gains are taxed at ~8.50%, while long-term gains face only ~5.00%. Holding assets for more than one year can save ~3.50% on gains.

  5. Contribute to retirement accounts. Traditional 401(k) and IRA contributions reduce federal AGI, which generally flows through to your Massachusetts return.

  6. Monitor the surtax threshold. If your income is near ~$1,000,000, timing income or deductions can keep you below the surtax trigger.

  7. Claim the commuter deduction. If you use public transit, deduct actual costs up to ~$750 for commuting expenses.

Key Takeaways

  • Massachusetts levies a flat ~5.00% income tax, with an additional ~4.00% surtax on income over ~$1,000,000.
  • Short-term capital gains are taxed at ~8.50%, significantly higher than the standard rate.
  • Personal exemptions are ~$4,400 (single) and ~$8,800 (joint), with additional exemptions for dependents and seniors.
  • The state EITC at ~40% of the federal credit is one of the most generous in the country.
  • The Senior Circuit Breaker Credit provides up to ~$2,590 for qualifying seniors.
  • There are no local income taxes in Massachusetts.

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