Massachusetts income tax rate for 2025 and 2026: 5%, plus the 4% surtax

Massachusetts sorts income into three parts and taxes each at its own rate. The Department of Revenue (DOR) lists a 5.0% rate on wages, salaries, tips, interest, dividends and long-term capital gains, 8.5% on short-term capital gains from assets held a year or less, and 12% on long-term gains from collectibles, after a 50% deduction. The general statute still prints an older 5.3% rate, but the law’s reduction triggers took it to 5%, which DOR applies and uses in its 2026 withholding tables.

There are no brackets below the surtax. The return also lets you choose, voluntarily, to pay 5.85% instead of 5%.

Since 2023 Massachusetts has added a 4% surtax on taxable income above a threshold that rises with inflation: $1,000,000 for 2023, $1,053,750 for 2024, $1,083,150 for 2025 and $1,107,750 for 2026. It applies to the total of all three parts of taxable income, so a large capital gain in one year can trigger it; short-term gains above the threshold pay 8.5% plus 4%.

There is no exception for selling your home: DOR says gain on a personal residence that is otherwise taxable counts toward the surtax, though the federal exclusion of up to $250,000 ($500,000 joint) still keeps most home-sale gain out of income. Everyone subject to the surtax must file and pay electronically, and since 2024 married couples who file jointly federally must also file jointly in Massachusetts. Employers withhold 9% on wages above the threshold.

A Massachusetts return starts from federal gross income, not adjusted gross income, and follows the Internal Revenue Code as of January 1, 2024, with some items followed currently. There is no standard deduction. Instead you take personal exemptions of $4,400 single or married filing separately, $6,800 head of household or $8,800 married filing jointly, plus $1,000 per dependent, $700 if 65 or older and $2,200 if blind.

For example, a single filer with $60,000 of wages deducts up to $2,000 of Social Security and Medicare tax withheld and the $4,400 exemption, leaving $53,600 taxed at 5%: $2,680, about 4.5% of wages.

The July 2025 federal tax law (Public Law 119-21) created deductions for 2025 through 2028 for qualified tips (up to $25,000), overtime pay (up to $12,500, or $25,000 joint), car loan interest (up to $10,000) and an extra $6,000 for people 65 or older. DOR’s TIR 26-4 lists all four as provisions Massachusetts does not adopt, so all tips and overtime pay are taxable at 5%, and neither car loan interest nor the senior deduction is allowed.

Massachusetts also did not adopt the federal state and local tax cap change, the qualified business income deduction or the new charitable deduction for non-itemizers. A 2026 law delays several federal business changes, such as the higher section 179 limits, until 2027.

Massachusetts does not tax Social Security. It also exempts contributory pensions from the federal government or from Massachusetts and its cities and towns, and noncontributory military pensions. Private pensions, annuities and IRA withdrawals are taxed at 5%, after you recover contributions Massachusetts already taxed. A pension from another state’s government plan is reported as income but can be deducted if that state does not tax Massachusetts government pensions.

Credits come off the tax. People with low income may owe nothing under No Tax Status: for 2025, income of $8,000 or less single, or $16,400 plus $1,000 per dependent for a joint return.

A resident must file if gross income is more than $8,000. Residents file Form 1 with Schedule HC, the health insurance schedule; nonresidents and part-year residents file Form 1-NR/PY. 2025 returns were due April 15, 2026, and DOR’s instructions give April 15, 2027 for 2026 returns; Patriots’ Day does not move either date.

Massachusetts does not accept the federal extension. You get an automatic six-month extension only if at least 80% of the tax you owe is paid by April 15, and there is no extension without payment. A return with no tax due is automatically extended to October 15.

Check a Massachusetts refund with MassTaxConnect’s refund status check, linked from DOR’s refund page; you do not need to log in. It asks for the tax year, your SSN or ITIN and the refund amount. By phone: (617) 887-6367, or (800) 392-6089 toll-free in Massachusetts.

DOR says e-filed returns with direct deposit take about 4 to 6 weeks and paper returns about 8 to 10 weeks, plus a week for a paper check. Common delays are a wrong SSN or bank account number, math errors, filing too early, an amended return or a refund taken for a tax or child support debt.

You are a Massachusetts resident if Massachusetts is your domicile, or if you keep a permanent home here and spend more than 183 days of the year in the state. Nonresidents pay Massachusetts tax on Massachusetts-source income, including wages for work done in Massachusetts, apportioned by days worked here. A New Hampshire resident who commutes to a Massachusetts job therefore files Form 1-NR/PY.

During the pandemic Massachusetts kept taxing commuters who worked from home, under a rule that ran from March 10, 2020 to September 13, 2021. New Hampshire asked the U.S. Supreme Court to hear a challenge, and the Court declined on June 28, 2021. Massachusetts residents pay tax on all income, wherever earned, and claim the credit for tax paid to the other state; part-year residents pay Massachusetts tax on everything earned while a resident.