Massachusetts Tax 2025: Guide to Income, Sales, Property, and Retirement Taxes

Massachusetts has $14,534 in state and local massachusetts income tax debt per capita and has a 69 percent funded ratio of public pension plans. Massachusetts’s tax system ranks 41st overall on the 2025 State Tax Competitiveness Index. Early in 2024, DOR made multiple clarifying updates to the Circular M’s withholding rules for supplemental wage payments, including bonuses. DOR acknowledges that some employers making supplemental wage payments early in the 2024 calendar year may not have had sufficient time to reflect the updates in the tax withheld on those payments. In such cases, DOR expects to be lenient in its imposition of penalties for underpayment of withholding tax. You can find more information on income tax computation and the various parts of taxable income on the Department of Revenue (DOR) website.

Property Tax Levies and Average Single Family Tax Bills

• Tax-Rates.org provides easy access to five of the most commonly used Massachusetts income tax forms, in downloadable PDF format.
• This guide provides a detailed breakdown of Massachusetts’ income tax structure, filing thresholds, and strategic ways to minimize tax burdens, especially for high-income earners.
• In Kentucky, all in-state property is subject to the inheritance tax, regardless of where the heir lives.
• The Massachusetts personal income tax previously conformed to the IRC as amended on January 1, 2022.
• This tax can significantly impact the value of the inheritance received by beneficiaries, necessitating careful planning to minimize its effects.
• Massachusetts currently has a flat income tax rate of 5% for the 2024 tax year, and this rate is expected to remain the same for the 2025 tax year.

You may also qualify for certain personal income tax credits, which can reduce the amount of tax you owe. Personal income tax deductions decrease your taxable income, which means you owe less taxes. Deductions are generally related to your expenses, but not Online Bookkeeping always. Recent discussions in the state legislature suggest possible revisions to income tax exemptions or additional deductions for middle-income earners.

Does Massachusetts tax Social Security benefits?

• The Massachusetts Department of Revenue administers the tax and provides guidelines and forms for compliance.
• A long-term capital gain is a profit from selling an asset you’ve owned for more than one year.
• TurboTax simplifies the process, whether you want to do your taxes yourself or get expert help.
• You may also qualify for certain personal income tax credits, which can reduce the amount of tax you owe.
• This is the last day people had to file their returns in a timely manner and pay any taxes due.
• The state’s income tax rate is only one of a handful of states that levy a flat rate.

Massachusetts has two marginal tax brackets, ranging from 5% (the lowest Massachusetts tax bracket) to 9% (the highest Massachusetts tax bracket). Each marginal rate only applies to earnings within the applicable marginal tax bracket, which are the same in Massachusetts for single filers and couples filing jointly. Most food sold in grocery stores is exempt from sales tax entirely. Clothing purchases, including shoes, jackets and even costumes, are exempt up to $175.

Federal Married (separate) Filer Tax Tables

If you don’t owe any taxes and didn’t file by the deadline, an extension to October is automatically granted. A city or town may also charge a local sales tax on the sales of restaurant meals.Visit TIR 09-13. The recording transactions elective PTE excise is imposed at a statutory rate of 5%, which cannot be increased to account for the 4% surtax. In adding up the sum of Part A, Part B, and Part C, any Part that is negative is treated as 0. In other words, only Parts with positive taxable income amounts are added together.

• However states choose to respond to other tax provisions of the One Big Beautiful Bill Act, they should conform to the pro-growth provisions, which represent a marked improvement in the corporate tax code.
• Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
• Unlike a Value Added Tax (VAT), the Massachusetts sales tax only applies to end consumers of the product.
• However, if you’re earning more than $1 million, there’s an additional 4% tax—often called the “Millionaires Tax.”
• The due date and payment date for returns and payments is extended for a specified period of time announced by the IRS unless we publicly announce otherwise.
• The graph below shows that in total for the 343 communities with certified FY2025 tax rates, tax levies increased from FY2024 to FY2025 by 5.1% ($1.1 billion) from $21.7 billion to $22.8 billion.

This guide aims to demystify the process, shedding light on various components, including the W-4 form, pre-tax and post-tax deductions, and more. With a blend of simple and complex sentences, let’s explore the ins and outs of your Massachusetts paycheck. Here you can find how your Massachusetts is based on a flat tax rate. When you prepare your return on eFile.com this is all calculated for you based on your income. Massachusetts conforms to the federal income exclusion for employer-provided parking, transit pass, and commuter highway vehicle transportation benefits.