What Is the Mass Income Tax Rate and Who Needs to File?

The Massachusetts DOR provides resources to help taxpayers choose the most advantageous status. If the sum is equal to or less than the surtax threshold, the required personal income tax withholding amount is 5% of the supplemental wage payment. A tax item from Part A, Part B, or Part C can reduce taxable income in another part only to the same extent it is otherwise permitted under the relevant statute. For example, under chapter 62 of the M.G.L., excess Part B losses may be deducted massachusetts tax brackets against capital gains attributable to a taxpayer’s trade or business when determining Part A or Part C taxable income. However, once taxable income in each part is determined, a negative amount in one part cannot be used to reduce taxable income in another part when determining the 4% surtax.

Wyoming State Tax Rate & Return Complete Guide

• We’ve built a platform to give everyone access to the tax and wealth-building tools typically reserved for wealthy individuals with a team of accountants and lawyers.
• Massachusetts collects a state income tax at a maximum marginal tax rate of %, spread across tax brackets.
• This update explains what has changed, who is affected, what actions are required, and how these rules might impact pending applications or future plans.
• The federal standard deduction for a Head of Household Filer in 2025 is $ 22,500.00.
• There are two ways to be considered a full-time resident of Massachusetts.

However, specific types of income are taxed at different rates, making it essential to understand how these rates apply to various income sources. The Tax tables below include the tax rates, thresholds and allowances included in the Massachusetts Tax Calculator 2022. Massachusetts has a graduated state individual income tax, with rates ranging from 5.00 percent to 9.00 percent. Massachusetts also has a 6.25 percent state sales tax rate and does not have local sales taxes. Massachusetts has a 1.04 percent effective property tax rate on owner-occupied housing value.

• The EITC rates and thresholds are adjusted annually to reflect changes in the economy and cost of living.
• We make it simple and seamless for our customers to take advantage of these hard-to-access tax-advantaged structures.
• That includes gas, electricity, steam and telecommunications services sold or rented within Massachusetts.
• The following tax tables are supported by iCalculator™ US as part of the suite of free tax tools available in the US Tax HUB we provide for Massachusetts.
• 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.

Form 1099 Uses Explained Types and Filing Guide

This $8,000 income threshold is per bookkeeping person, giving married couples the option to file jointly or separately. Calculate your annual take home pay in 2025 (that’s your 2025 annual salary after tax), with the Annual Massachusetts Salary Calculator. Taxpayers must consider the 4% surtax when determining the total amount of tax due on or before the return’s original due date to obtain an automatic extension of time to file the return. For example, personal income taxpayers must pay 80% of the tax due, including the 4% surtax, by April 16, 2024, to have a valid extension to file the tax year 2023 return. These plans are designed to encourage long-term savings by providing tax advantages. Contributions made to these plans are typically pre-tax, meaning they are deducted from the employee’s gross income before taxes are calculated.

Massachusetts Standard Deductions & Personal Exemption Amounts

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• However, if you’re earning more than $1 million, there’s an additional 4% tax—often called the “Millionaires Tax.”
• There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state.
• The Massachusetts DOR provides resources to help taxpayers choose the most advantageous status.
• Understanding Tax Return Status and Amended Tax Returns Filing taxes can often feel overwhelming, but…
• For purposes of calculating the credit, total income and maxi­mum credit thresholds are adjusted annually for inflation.
• The difference between taxable income and the surtax threshold is the amount subject to the 4% surtax.
• A nonresident individual who must file a Form 1-NR/PY to report the 4% surtax must include that individual’s taxable income as accounted for on a composite return.

Available Deductions

The federal standard deduction for a Head of Household Filer in 2022 is $ 19,400.00. As home values have spiked, Florida and other states are weighing elimination of property taxes. In the United States, taxes are the single most expensive ingredient in beer. The tax burden accounts for more of the final price of beer than https://www.bookstime.com/ labor and materials combined—the many different layers of applicable taxes combining to total as much as 40.8 percent of the retail price. Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.

Form 5329: Your Guide to Managing Retirement Penalties

Part-year residents report income earned while living in Massachusetts and any income sourced from the state during their non-residency. Nonresidents are taxed only on Massachusetts-sourced income, such as wages earned in the state, rental income from Massachusetts properties, or profits from local businesses. A nonresident who owes the 4% surtax may participate in a composite return. You can find more information on income tax computation and the various parts of taxable income on the Department of Revenue (DOR) website. If you earn income in Massachusetts, you know you’ll lose something to taxes. It’s important to understand your state’s income tax and how it will impact your financial future, not least because that knowledge will empower you to take action to reduce your tax bill today.