Massachusetts state income tax
Massachusetts has a state income tax. It is graduated, with a top marginal rate of 9%. 5% flat on earned and unearned income, plus 4% surtax on taxable income exceeding $1,107,750 (2026 threshold, inflation-adjusted annually; $1,083,150 in 2025), effective top rate 9% Capital gains are taxed under special rules (see below).
Does Massachusetts have a state income tax?
Yes. Massachusetts taxes individual income on a graduated schedule topping out at 9%. 5% flat on earned and unearned income, plus 4% surtax on taxable income exceeding $1,107,750 (2026 threshold, inflation-adjusted annually; $1,083,150 in 2025), effective top rate 9%
| Item | Massachusetts |
|---|---|
| State income tax | Yes, graduated |
| Top marginal rate | 9% |
| Capital gains | Special rules, up to 8.5% |
| State sales tax | 6.25% |
| Avg. property tax rate | 1% of home value |
| Estate / inheritance tax | Estate tax (exemption $2,000,000) |
How does Massachusetts tax capital gains?
Massachusetts taxes capital gains under special rules rather than at the ordinary income rate. Short-term capital gains (held <1 year) taxed at 8.5% since January 1, 2023. Long-term gains (>1 year) taxed at 5%. The 4% surtax on income over the annual threshold ($1,107,750 for 2026) applies on top of either rate for high earners. You still owe federal capital gains tax on top of any state tax. See how capital gains tax works in 2026.
What about retirement income in Massachusetts?
Retirement income is taxed differently from wages in many states. For how Massachusetts treats Social Security, pensions, and 401(k)/IRA withdrawals, see Massachusetts retirement taxes.
Sources
- Massachusetts income tax rates and brackets: Massachusetts Department of Revenue / Taxation.
- Massachusetts capital gains treatment: Massachusetts tax authority.
- Massachusetts sales tax: Massachusetts Department of Revenue.