The Federal income tax also has a standard deduction, personal exemptions, and dependant deductions, though they are different amounts than Massachusetts’ and may have different rules. Technically, you don’t have just one “tax bracket” massachusetts tax brackets – 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. For comparison purposes, however, your Massachusetts tax bracket is the tax bracket in which your last earned dollar in any given tax period falls. The Earned Income Tax Credit (EITC) benefits low-to-moderate-income working individuals and families.

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Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $2 million. If the estate has a gross value (before any deductions) over that level, a Massachusetts estate tax return must be filed. Massachusetts does not have a standard deduction, but it allows many of the same itemized deductions as the federal government, as well as some additional ones. Property tax rates are based on home values and vary by location.

Will I or my heirs have to pay inheritance and estate tax in Massachusetts?

• 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.
• Hawaii significantly revised its individual income tax brackets under H.B.
• The law also repealed previously enacted tax triggers, instead prescribing a rate reduction to 2.95 percent in 2026, and 2.9 percent in 2027 and beyond.
• Short-term capital gains, which are realized in less than a year, are taxed at a rate of 8.5%, as are long-term gains on the sales of collectibles.
• 8, enacted in September 2023, the top individual income tax rate in Arkansas was reduced from 4.7 percent to 4.4 percent for tax years beginning on or after January 1, 2024.

The most significant taxes in Massachusetts are the sales and income taxes, both of which consist of a flat rate paid by residents statewide. While the state sales tax of 6.25% is among the nation’s highest, there are no local sales taxes levied in Massachusetts. 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.

Mississippi State Income Tax in 2025: A Guide

Massachusetts does not tax Social Security income, offering additional deductions and exemptions for seniors, which can reduce their overall state income tax liability. To prevent double taxation, Massachusetts allows proportional deductions and credits, such as the credit for taxes paid to other states, outlined in Chapter 62, Section 6(a). Accurate documentation, including W-2s and records of out-of-state income, is essential for compliance and proper allocation of income.

Filing status plays a significant role in determining a taxpayer’s obligations in Massachusetts. Options include single, married filing jointly, married filing separately, and head of gross vs net household, each affecting tax liability and eligibility for deductions and credits. Massachusetts has an individual income tax that applies to all residents and nonresidents of the state.

Return due in 2023

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. A product that costs more than $175 is taxable above that amount, so a $200 pair of shoes would be taxed at 6.25% on the $25 above the exemption limit. Other exempt items include periodicals, admissions tickets (i.e. to movies or sporting events), professional or personal services and most health care products. Remember that Massachusetts may have very different deduction laws from the Federal Income Tax, so you may have to write a whole new list of deductions for your Massachusetts income tax return. Qualifying deductions might include an itemized deduction, the Massachusetts standard deduction, exemptions for dependants, business expenses, etc.

• 252, enacted in March 2024, New Mexico made notable changes to its tax bracket structure, primarily affecting low- and middle-income households.
• The total penalty depends on income and only apply to individuals with incomes more than 150% of the federal poverty level.
• You can save time and money by electronically filing your Massachusetts income tax directly with the .
• A tax credit allows taxpayers to reduce the amount of taxes they are required to pay.
• Contact your city or town to see if they participate.View tax tips for seniors and retirees in Massachusetts.

Property Taxes

Married couples often benefit from filing jointly, while the head of household status offers higher deductions for single taxpayers supporting dependents. Taxpayers should carefully evaluate their filing status, especially when life changes such Car Dealership Accounting as marriage or divorce occur, as these decisions can have long-term financial implications. The Massachusetts DOR provides resources to help taxpayers choose the most advantageous status. You can save time and money by electronically filing your Massachusetts income tax directly with the .