Data Notice: Massachusetts tax data in this guide uses projected 2026 figures derived from current law and IRS inflation indexing. Mid-year legislative changes may alter rates or brackets. Check with the Massachusetts revenue department for the latest information. [taxes-massachusetts-2026]

Taxes in Massachusetts: State Tax Guide 2026

The content in this taxes in massachusetts: state tax guide 2026 guide is educational and informational. It should not be relied upon as tax, legal, or financial advice. Individual tax situations require personalized analysis by a qualified professional. Consult a CPA or enrolled agent for your specific needs.

Massachusetts has undergone a significant tax shift. The state’s traditional flat income tax of 5.00% was joined in 2023 by a 4% “millionaire’s tax” surtax on income above $1 million, bringing the effective top rate to 9.00%. Combined with above-average property taxes and a 6.25% sales tax, the Bay State now ranks among the higher-tax states in the nation, particularly for high earners.

Massachusetts Income Tax Rates (2026)

Massachusetts uses a flat-rate income tax with an additional surtax at high income levels:

Tax Rate	Taxable Income Range
5.00%	All taxable income up to ~$1,000,000
9.00%	Income over ~$1,000,000 (5.00% base + 4.00% surtax)

The $1 million threshold is adjusted annually for inflation. The surtax applies to all income types, including capital gains.

Massachusetts does not use filing-status-based brackets. The flat 5.00% rate applies equally to single and married filers, though exemptions and deductions vary.

Short-term capital gains (assets held one year or less) are taxed at 12.00% — the 8.00% short-term rate plus the 4.00% surtax for millionaires, or 8.00% for those below the threshold. Long-term capital gains are taxed at the standard 5.00% (or 9.00% for millionaires).

Sales Tax

Component	Rate
State rate	6.25%
Local add-on	None (no local sales tax)
Combined rate statewide	6.25%

Massachusetts does not allow municipalities to add local sales taxes, keeping the rate uniform statewide.

Exempt from sales tax: Clothing items under ~$175, most groceries, prescription medications, and newspapers. Items of clothing priced above ~$175 are taxed only on the amount exceeding that threshold.

Property Tax

Metric	Amount
Average effective rate	~1.12%
National average	0.99%

Property taxes vary substantially by municipality. Rates in some towns west of Boston fall below 1.00%, while cities like Springfield, Worcester, and some Boston suburbs exceed 1.50%. Massachusetts law requires that all property be assessed at full market value and reassessed at least every three years.

Residential exemption: Boston and a few other cities offer a residential exemption that shifts part of the property tax burden from owner-occupied homes to commercial and rental properties. In Boston, this exemption reduces the taxable value of a primary residence by approximately ~$300,000.

Other Taxes

Estate tax: Massachusetts imposes an estate tax on estates valued above ~$2,000,000. This is a “cliff” tax — once the estate exceeds $2 million, the entire estate is taxed, not just the amount above the threshold. Effective rates range from ~0.80% to ~16.00%.
No inheritance tax: Beneficiaries do not pay a separate inheritance tax.
Capital gains: Long-term gains taxed at 5.00% (9.00% for millionaires). Short-term gains taxed at 8.00% (12.00% for millionaires).
Excise taxes: Motor vehicle excise of ~$25 per $1,000 of assessed value. Cigarette tax of ~$3.51 per pack. Gas tax of ~$0.28 per gallon.
Local option meals tax: Municipalities can add a 0.75% tax on restaurant meals (on top of the 6.25% sales tax).
Room occupancy tax: ~5.70% state rate, plus local add-ons. Short-term rentals (Airbnb, etc.) are subject to these taxes.

Tax Breaks and Credits

No tax on Social Security: Massachusetts does not tax Social Security benefits.
Pension income exemption: Government pension income (federal, state, military) is exempt from Massachusetts income tax. Private pension income does not receive this exemption.
Rent deduction: Renters can deduct 50% of rent paid, up to ~$3,000 per year.
Commuter deduction: Deduction for transit and commuter rail passes, up to a cap.
Dependent care credit: A percentage of the federal child and dependent care credit.
Lead paint credit: Up to ~$1,500 for lead paint removal from residential properties.
Solar/renewable energy credits: Various credits for residential solar installations and energy efficiency improvements.
529 plan: Massachusetts does not offer a state tax deduction for 529 contributions.

Key Takeaways

The flat 5.00% income tax rate applies to most residents, but income over ~$1 million faces a 9.00% effective rate
Short-term capital gains are taxed at a steep 8.00% (or 12.00% for millionaires), well above most states
The $2 million estate tax threshold is among the lowest nationally, and the cliff structure can result in unexpected liability
Property taxes run above the national average, though Boston’s residential exemption provides meaningful relief for homeowners
No sales tax on clothing under ~$175 and no local sales tax add-ons keep consumption taxes relatively moderate

Next Steps

Compare Massachusetts to other states at State Income Tax Comparison: All 50 States Ranked
Understand your federal obligation with the Federal Income Tax Guide 2026
Explore deductions you may be missing — Tax Deductions You’re Probably Missing
Ready to file? See How to File Your Taxes Step by Step

Tax information is for educational purposes only. Consult a licensed tax professional.