Rates
Unlike the federal return, there are no brackets: the rate depends on the type of income, not on how much you earn, until the surtax threshold.
| Income | Rate |
|---|---|
| Wages, interest, dividends, long-term capital gains, other income | 5% |
| Short-term capital gains (since tax year 2023) | 8.5% |
| Long-term gains on collectibles | 12% (after a 50% deduction) |
| Taxable income above the surtax threshold | Additional 4% ($1,083,150 for 2025; $1,107,750 for 2026) |
Exemptions instead of a standard deduction
Massachusetts does not allow the federal standard deduction or federal itemized deductions. It reduces income with personal exemptions, set by filing status, plus additional exemptions for dependents, age and blindness.
| Exemption | Amount |
|---|---|
| Single or married filing separately | $4,400 |
| Head of household | $6,800 |
| Married filing jointly | $8,800 |
| Each dependent | $1,000 |
| Age 65 or older by 31 December (each spouse) | $700 |
| Blindness (each) | $2,200 |
Massachusetts-only deductions
- Rent paid for a Massachusetts principal residence: 50% of rent, up to $4,000 (since tax year 2023)
- Contributions to a Massachusetts 529 college savings or prepaid tuition plan: up to $1,000 per person, $2,000 married filing jointly
- Commuting: E-ZPass Massachusetts tolls, MBTA and regional transit fares and passes, commuter rail, bus and boat passes, and, since 2023, bikeshare and bicycle costs
- Undergraduate tuition above 25% of Massachusetts AGI
- Interest on qualified undergraduate student loans, with no cap
- Amounts paid into Social Security, Medicare or certain government pensions, up to $2,000 per person
Where Massachusetts and federal income differ
Some income is taxed on one return and not the other. The biggest differences for individuals are retirement income and investment losses.
| Item | Federal | Massachusetts |
|---|---|---|
| Social Security | May be partly taxable | Not taxed |
| Pensions from Massachusetts, its cities and towns, and contributory federal or other-state plans | Taxable | Excluded |
| Traditional IRA contributions | May be deductible | Not deductible (so later distributions are partly tax-free) |
| Capital losses | Offset gains plus up to $3,000 of ordinary income | Offset gains plus up to $2,000 of interest and dividends; not other income |
| Qualified business income deduction | Allowed | Not allowed |
| Tips, overtime, car loan interest, senior deduction (2025 to 2028) | Deductible within limits | Not allowed |
| Qualifying surviving spouse status | Available | Not available; usually head of household |
| Massachusetts bank interest exclusion | Not applicable | Repealed from tax year 2024 |
Filing jointly and the surtax
From tax year 2024, married couples who file jointly for federal purposes must also file jointly in Massachusetts, unless an exception applies. That matters most for the 4% surtax, because a joint return has one threshold, not two. Our surtax page covers this in detail.
Lower-income filers may qualify for Massachusetts No Tax Status or the Limited Income Credit, which can reduce Massachusetts tax to zero. The income limits change each year and are set out in the Form 1 instructions.
Where we come in
We build the Form 1 from Massachusetts rules, not from the federal return, so state-only deductions and exclusions are claimed and disallowed federal items are not. Before we start, we give you a scope and a price in writing.
Figures on this page were checked against the IRS and Massachusetts sources listed alongside on 28 Sep 2026. They change — confirm the current amount before relying on one.
General information for owner-led businesses, not advice for your specific situation. Tax and accounting rules change, and how they apply depends on facts particular to your business. Talk to us — or to another qualified professional — before acting on anything here.
