By understanding these elements, individuals and businesses can optimize their financial planning and avoid unnecessary tax liabilities. The federal income tax is a tax that the United States government levies on the annual retained earnings balance sheet earnings of individuals, corporations, trusts, and other legal entities. This tax is progressive, which means the tax rate you pay — the percentage of each additional dollar that goes to the government — increases as your income increases. For individuals, the income tax rates on ordinary income (as distinguished from capital gains) start at 10% and increase up to 37% as your income tax bracket increases. Massachusetts has a graduated state individual income tax, with rates ranging from 5.00 percent to 9.00 percent.

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The current Massachusetts income tax rates and the 4% surtax on income over $1 million are effective massachusetts income tax brackets for the 2025 tax year. The surtax was first applied in the 2023 tax year and continues without change into 2025. There are no announced changes for the remainder of the year as of July 9, 2025. This page shows Tax-Brackets.org’s archived Massachusetts tax brackets for tax year 2021. This means that these brackets applied to all income earned in 2021, and the tax return that uses these tax rates was due in April 2022.

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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. Residents who are 65 or older by Dec. 31, 2024, can receive a $700 exemption on top of the state’s personal exemptions. Contact your city or town to see if they participate.View tax tips for seniors and retirees in Massachusetts. Anyone who files a Massachusetts state tax return is given a personal exemption amount based on their tax filing status. Taxpayers may also be eligible for additional exemptions, such as those for having qualifying dependents or for having paid certain types of medical or dental costs throughout the tax year.

• This surtax, also known as the “Fair Share Amendment,” was approved by voters in 2022 and took effect in 2023.
• Consulting with a tax professional can help ensure compliance while optimizing tax savings.
• There are no new changes to the income tax rates or brackets for 2025 beyond the existing structure.
• The Massachusetts Department of Revenue treats these entities under the same individual income tax rules.
• Americans may be surprised to see just how much they are taxed for renting a car.

Seniors aged 65 or older who own or rent their primary residence may be eligible for the Senior Circuit Breaker Tax Credit, with a maximum of $2,730 for 2024, subject to income and property value limitations. DonateAs a nonprofit, we depend on the generosity of individuals like you. Taxes are an important part of the mix, and modernizing a state’s tax structure helps position it for growth. States that rank better on the Index have better-structured tax codes, and states with better-structured tax codes get Wins Above Replacement. Americans may be surprised to see just how much they are taxed for renting a car.