Massachusetts

Sales Tax

  • Statewide: 6.25%
  • Counties cannot levy an additional sales tax.
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
    • Prepared Foods: 7%
    • Clothing: Single items exempt if under $175
  • Gasoline Tax: 44.94 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 50.94 cents/gallon (Includes all state, local, and federal taxes)

 

Personal Income Tax

  • Personal Income Tax Rate: 5.0% (9% if income over $1 million)
  • Standard deduction: None
  • Personal Exemption Allowance: $4,400. Dependent Exemption: $1,000
  • Itemized Deductions Allowed? Yes, subject to limitations
  • Retirement Income
    • Social Security: Exempt
    • IRAs: Portion on which Massachusetts tax was previously paid not taxable
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates
    • Private pensions: Taxable at ordinary income tax rates
    • Public Pensions: Exempt
  • Military Pay
    • Active Duty Pay: Taxable to the extent included in federal Adjusted Gross Income
    • Military Retirement Pay: Exempt
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Exempt
Income Tax Comments: State allows county- and city-level income tax. 

 

Property Tax

  • Local municipalities average 1.20% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value; reappraised annually
  • Relief programs for:
    • 65 and over: Minimum tax credit of $1,000 available if meet requirements. Renters' programs available. Additional credits available if over 70.
    • Circuit Breaker Tax Credit: Available if tax exceeds 10% of income plus water and sewer expenses. Available if income less than $64,000 ($96,000 for married filing jointly) and assessed value is less than $884,000.  
    • Disabled Veterans/Surviving Spouse/Gold Star Parents: Tax credit of up to $2,000 based on service-linked disability percentage
    • Work-Off: Volunteers over 60 can work off some of their property tax liability. Not available in all municipalities. 
  • Personal Property Tax: Yes. Rates and exemptions vary.
  • Deferral programs are also available.

 

Inheritance & Estate Taxes: Estates over $1 million are taxed using a maximum federal credit for state death taxes plus a percentage of any amount exceeding that credit with a maximum rate of 16%. Estates left to spouses are tax-free, and there is an unlimited charitable deduction. There is no inheritance tax.

 

Department of Revenue website: www.mass.gov/dor

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