Massachusetts Tax Rates, Standard Deductions, Forms, and More

Massachusetts imposes a 6.25% sales tax on most tangible personal property, certain services, and telecommunications services. However, some items, like groceries and clothing under $175, income statement are exempt from sales tax. Use Beem’s online tax filing services without any hassle, regardless of your employment status. The standard deduction is a fixed amount you can subtract from your taxable income. It’s crucial if you need more itemized deductions to exceed the standard deduction.

Deductions

• We help you find deductions and credits you qualify for in Massachusetts, and keep more of your hard-earned money.
• As part of its comprehensive tax reform, effective January 1, 2025, Iowa consolidated its three tax brackets into a single bracket with a rate of 3.8 percent, joining the group of states with flat individual income taxes.
• Massachusetts’s flat tax rate should make filing your state income tax return easy, but residency rules, deductions, and credits can sometimes complicate the process.
• Technically, you don’t have just one «tax bracket» – you pay all of the Massachusetts marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.
• Using deductions is an excellent way to reduce your Massachusetts income tax and maximize your refund, so be sure to research deductions that you mey be able to claim on your Federal and Massachusetts tax returns.
• Proper planning with a tax professional can help mitigate the impact of the millionaire tax while ensuring compliance with state regulations.

Hawaii significantly revised its individual income tax brackets under H.B. Starting January 1, 2025, the lowest rate of 1.4 percent will apply to single-filer income below $9,600 (up from $2,400 in 2024), while the highest rate of 11 percent will apply to income exceeding $325,000 (up from $200,000). Additionally, the bill doubled the standard deduction from $2,200 to $4,400 for single filers for tax years 2024 and 2025. Despite these changes, Hawaii still has one of the most complex bracket structures in the nation, with 12 brackets.

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• Unlike the Federal Income Tax, Massachusetts’ state income tax does not provide couples filing jointly with expanded income tax brackets.
• Capital gains in those categories are included as taxable income on the Massachusetts income tax return.
• Accurate documentation, including W-2s and records of out-of-state income, is essential for compliance and proper allocation of income.
• Some states are conformed to out-of-date versions of the Internal Revenue Code (IRC), with California, which uses a 2015 (pre-TCJA) conformity date, as the most extreme case.
• When calculating your Massachusetts income tax, keep in mind that the Massachusetts state income tax brackets are only applied to your adjusted gross income (AGI) after you have made any qualifying deductions.
• Use tax is a 6.25% tax paid on out-of-state or out-of-country purchases that are used, stored or consumed in Massachusetts and on which no Massachusetts sales tax (or less than 6.25%) was paid.

Learn How AARP is Fighting for Better Medicare

• While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
• Those earning less than this amount do not need to file a return, but they can still file a return to claim refundable tax credits.
• For all of the tax forms we provide, visit our Massachusetts tax forms library or the ‘s tax forms page.
• Effective January 1, 2025, the tax rate dropped from 4.5 percent to 4.25 percent.
• Although the bill allowed for an accelerated schedule of future individual income tax rate reductions, the revenue conditions were not met for 2025, so the rate remains at 5.39 percent this year.

754, enacted in May 2023, reduced the top individual income tax rate from 5.84 percent in 2024 to 5.20 percent in 2025 and outlined the gradual reduction of the state’s top rate to 3.99 percent by 2027. 521 was enacted, retroactively reducing Idaho’s individual and corporate income tax rates from 5.8 to 5.695 percent as of January 1, 2024. Massachusetts has a flat income tax rate of 5%, but charges a 4% surtax on income over $1 million. The Insurance Accounting state’s income tax rate is only one of a handful of states that levy a flat rate. Massachusetts also has a flat statewide sales tax rate of 6.25%. For most taxpayers, Massachusetts has a flat income tax of 5 percent.

How To File Your Massachusetts Income Tax Return

You can learn more about how the Massachusetts income tax compares to other states’ income taxes by visiting our map of income taxes by state. While Massachusetts has a flat tax structure, states like California and New York impose higher top marginal rates. However, Massachusetts’ millionaire tax makes it less attractive for high earners compared to states like Florida or Texas, which have no income tax. Businesses and high-net-worth individuals often consider these tax implications when deciding where to establish residency. There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state.

Federal Deductions Not Allowed on Massachusetts Schedule Y

The Personal Exemption, which is supported by the Massachusetts income tax, is an additional deduction you can take if you (and not someone else) are primarily responsible for your own living expenses. Likewise, you can take an additional dependent exemption for each qualifying dependent (like a child or family member), who you financially support. Keep in mind that this estimator assumes all income is from wages, assumes the standard deduction, and does not account for tax credits.

• Massachusetts taxpayers must stay informed about the 2025 tax brackets, income tax rates, and filing thresholds.
• The standard deduction is a fixed amount you can subtract from your taxable income.
• A long-term capital gain is a profit from selling an asset you’ve owned for more than one year.
• The Senior Circuit Breaker Credit provides relief to taxpayers aged 65 and older with high property taxes relative to their income.
• Veterans Administration disability compensation is also not taxed in the state.Spouses of military personnel may be eligible for exemptions.
• If you are required to file Form M-4768 electronically, register on MassTaxConnect to file your extension.

Forty-four states levy a corporate income tax, with top rates ranging from a massachusetts tax brackets 2.25 percent flat rate in North Carolina to a 11.5 percent top marginal rate in New Jersey. In some states, a large number of brackets are clustered within a narrow income band. For example, Virginia’s taxpayers reach the state’s fourth and highest bracket at $17,000 in taxable income. In other states, the top rate kicks in at a much higher level of marginal income. For example, the top rate kicks in at or above $1 million in California (when the “millionaire’s tax” surcharge is included), Massachusetts, New Jersey, New York, and the District of Columbia.

Sales & Investments Calculators

This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions. Proper planning with a tax professional can help mitigate the impact of the millionaire tax while ensuring compliance with state regulations.