Massachusetts Tax Tables Tax Rates and Thresholds in Massachusetts

The DCTC is refundable but is not transferable, and is payable without interest. A taxpayer who is a non-resident throughout the entire taxable year cannot claim the credit. A taxpayer claiming the DCTC may not also claim the Household Dependent Tax Credit. The 4% surtax applies to all chapter mass tax brackets 62 taxpayers, including individuals, trusts, estates, and unincorporated associations, that have taxable income exceeding the surtax threshold in a taxable year beginning with tax year 2023.

• 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.
• Massachusetts requires most adults 18 and over with access to affordable health insurance to obtain it.
• Perhaps office supplies, repairs on your office computers, building repairs, or even purchasing your workers’ suitable clothing for their job (e.g. a plumber should be wearing a boiler suit).
• Consequently, higher earners contribute more to the state’s tax revenue.
• In Massachusetts, average property taxes are paid about 1.14% of assessed home value, according to the Tax Foundation.
• Remember that you’ll only pay a higher tax rate on income exceeding specific thresholds.
• The Personal Exemption, which is supported by the Massachusetts income tax, is an additional deduction you can take if you (and not someone else) are primarily responsible for your own living expenses.

Are there any tax breaks for older Massachusetts residents?

For tax year https://www.bookstime.com/articles/how-to-write-construction-invoice 2021, an eligible taxpayer’s total income cannot exceed $62,000 in the case of a single filer who is not a head of household filer; $78,000 for a head of household filer; and $93,000 for joint filers. To qualify for the credit, a taxpayer must occupy the property as his or her principal residence. 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. Starting with tax year 2023, personal income taxpayers must pay an additional 4% (4% surtax) on taxable income over $1,000,000, increased annually for inflation (surtax threshold).

Massachusetts sales tax

If your principal residence is in Massachusetts and you paid rent to a landlord in the past year, you can deduct 50% of the rent paid, up to $4,000 (up to $2,000 for married people filing separately). Sale, rental or use of tangible personal property, including https://www.facebook.com/BooksTimeInc/ cigarettes, telecommunications services and certain fuel. 5.00% For wages exceeding $1,053,750, there is an additional surtax of 4%. For income exceeding $1,053,750, there is an additional surtax of 4%.

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• There is an additional 4% surtax for earnings over $1,000,000.
• In other words, only Parts with positive taxable income amounts are added together.
• 62, §§ 4(d) and 5A, as amended by §§ 28 and 29 of the FY24 Budget.
• A nonresident taxpayer who participates in a composite return but is required to file a Form 1-NR/PY to report the 4% surtax must include all income from Massachusetts sources earned by the nonresident in the calculation of taxable income on such form.
• 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.
• This includes the taxable income of the individual that is reported on the composite return.

You can learn more about how the Massachusetts income tax compares to other states’ income taxes by visiting our map of income taxes by state. Residents of Massachusetts are also subject to a penalty if they do not have health insurance coverage, which is paid through their tax return. There is a three-month grace period for health coverage lapses, after which the penalty accumulates on a monthly basis, up to about $183 per month.

• Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.
• Boston Harbor may be the site of the most famous tax protest in history, but today Bay Staters pay taxes on a lot more than tea.
• Most refunds are claimed on an original return and will be issued automatically by the Department.
• A taxpayer claiming the HDTC may not also claim the Dependent Care Tax Credit.
• For most calendar year filers, returns are due April 19, 2022.

Where To Send Your Massachusetts Tax Return

Besides income tax, you are also required to pay FICA taxes (Social Security and Medicare). By funding essential social programs, these deductions benefit both current and future generations. Notably, employees and employers share the responsibility of contributing to these programs. Long-term capital gains from investments are taxed at 5 percent in Massachusetts, and short-term capital gains are taxed at 8.5 percent. Long term gains from the sale or exchange of collectibles is taxed at 12 percent. A long-term capital gain is a profit from selling an asset you’ve owned for more than one year.

Understanding your Massachusetts income taxes

Massachusetts requires its own form for extensions, which can be completed electronically or by mail. The filing extension is automatic, with no need to file forms, if at least 80 percent of the tax due is paid by the April 17 deadline. Learn more about filing an extension, as well as penalties and interest.This guide was originally published on March 16, 2023 and has been updated to reflect new information. Most earners in the Bay State pay an income tax rate of 5 percent, though Massachusetts charges a surtax for income over $1 million starting with the 2023 tax year.The average property tax rate and the sales tax in Massachusetts fall in the middle of the pack across all states. Massachusetts has numerous tax benefits for older residents, including a 65-or-over exemption, a Senior Circuit Breaker tax credit, an opportunity in some cities and towns to volunteer in exchange for a property tax bill reduction and a $2 million estate tax exemption.

For income exceeding $1,053,750, there is an additional surtax of 4%. The Herald published a report on city payroll data earlier this year, showing there are 66 people in the mayor’s office making a total of $5.2 million. Eighteen of those staffers are making north of $100,000, the data show. Circular M provides detailed rules for withholding, including an example of the required computation for bonuses on page 13.

Massachusetts State Income Tax

The credit is worth the cost of the removal or fix, up to $3,000. Meanwhile, if you were only able to bring your residence into interim control, defined by the state as temporarily addressing lead hazards, you’re entitled to a credit worth a maximum of $1,000. Condo owners are also entitled to a credit for repairs done to common areas in addition to the work done in their individual units.