There are two important concepts married couples need to be aware of regarding the Massachusetts estate tax. There is no state income tax in New Hampshire, so your Social Security, benefits, pension, and retirement distributions are safe. However, New Hampshire recently eliminated its tax on dividen and interest income as of tax year 2025. Michigan recently passed legislation that will allow retirees to claim the maximum pension deduction in 2026, regardless of age.

• Federal income tax and FICA tax withholding are mandatory, so there’s no way around them unless your earnings are very low.
• In some states, a large number of brackets are clustered within a narrow income band.
• Notably, Massachusetts has the highest maximum marginal tax bracket in the United States.
• A financial advisor can help you understand how taxes fit into your overall financial goals.
• 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.
• Likewise, you can take an additional dependent exemption for each qualifying dependent (like a child or family member), who you financially support.
• This differs from many other states’ approaches to personal income tax, which typically tax different portions of your income at different rates.

State Corporate Income Tax Rates and Brackets, 2020

Four states—Alaska, Illinois, Minnesota, and New Jersey—levy top marginal corporate income tax rates of 9 percent or higher. Married Filing Jointly is the filing type used by taxpayers who are legally married (including common law marriage) and file a combined joint income tax return rather than two individual income tax returns. Let’s consider a single individual whose ordinary income is $350,000. This individual would qualify for the $15,000 standard deduction, reducing his or her taxable income to $335,000, putting them in the 35% tax bracket.

Federal Income Tax Tables in 2020

Residents who are 65 or older by Dec. 31, 2024, can receive a $700 exemption on top of the state’s personal exemptions. Contact your city or town to see if they participate.View tax tips for seniors and retirees in Massachusetts. If you are unsure about your tax situation or how the Massachusetts income tax rates and How to Run Payroll for Restaurants surtax apply to you, visit the Massachusetts Department of Revenue for official information, or speak with a qualified tax professional. Taking these steps now will help you avoid surprises and stay on the right track for 2025 and beyond. As of July 9, 2025, there are no new changes to the Massachusetts income tax rates or the surtax.

Calculated Taxes

Commercial tax rates increased in 119 communities and decreased in 222 communities. The highest FY2025 commercial tax rate is Holyoke ($38.55) and the lowest is Edgartown ($2.65). The greatest dollar increase from FY2024 in a commercial tax rate is Sandisfield ($4.69), while the greatest dollar decrease is Needham ($3.66). In Massachusetts, average property taxes are paid about 1.04% of assessed ma income tax rate home value, according to the Tax Foundation. Once you’ve filed your tax return, all you have to do is wait for your refund to arrive.

• Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 24 percent of combined state and local tax collections.
• For Massachusetts residents, the adjusted gross estate is the gross estate minus any real and/or tangible personal property located outside of Massachusetts minus $60,000.
• Wyoming is one of the states with no personal income tax, so you won’t need to pay state income tax on your retirement income or any other type of earnings.
• This tool is freely available and is designed to help you accurately estimate your 2024 tax return.
• In Massachusetts, in the lowest income bracket – families making less than $26,800 annually – pay 8.2 percent of their income in taxes, while the top 1 percent making over $1,000,600 pay 8.9 percent.
• 1001 was adopted, further reducing the top marginal rate to 3.9 percent, retroactively effective as of January 1, 2024.
• Effective January 1, 2025, the tax rate goes down from 4.7 percent to 4.4 percent (applied on taxable income exceeding $10,000).

Author: Tom Guilfoyle – Bureau of Accounts

Bella graduated from The University of Oklahoma with a bachelor’s degree in journalism. Chris Hutchison helped build NerdWallet’s editorial operation and has directed coverage across banking, investing, taxes and insurance. Before joining NerdWallet, he was an editor and programmer at ESPN and an editor at the San Jose Mercury News. Navigating the complexities of state taxes can be daunting, but understanding Massachusetts’ tax landscape is essential for residents and newcomers alike.

• Remember that Massachusetts may have very different deduction laws from the Federal Income Tax, so you may have to write a whole new list of deductions for your Massachusetts income tax return.
• You could also use that extra money to make extra payments on loans or other debt.
• Some states are conformed to out-of-date versions of the Internal Revenue Code (IRC), with California, which uses a 2015 (pre-TCJA) conformity date, as the most extreme case.
• Commercial tax rates increased in 119 communities and decreased in 222 communities.
• Georgia taxes most retirement income, but the state offers a hefty retirement income exclusion.
• There is also an estate tax that applies to estates valued over $3 million.
• Unlike a sales tax, a gross receipts tax is assessed on businesses and applies to transactions at every stage of the production process, leading to tax pyramiding..

• Seven states have a flat income tax, and of those seven Massachusetts has the highest state income tax rate.
• Your estate is subject to the Massachusetts estate tax if you have a gross estate worth more than $2 Million and you either (1) are a resident of Massachusetts or (2) own real estate or tangible personal property located in Massachusetts.
• The highest income tax bracket is lower in Oklahoma than in many other states, but most Oklahoma taxpayers fall into the state’s highest bracket.
• As part of its comprehensive tax reform, effective January 1, 2025, Iowa consolidated its three tax brackets into a single bracket with a rate of 3.8 percent, joining the group of states with flat individual income taxes.
• The same applies if you receive Railroad Retirement Board benefits — your Part B IRMAA and Part D IRMAA are typically deducted from your payment.
• 3, enacted in October 2022, Missouri’s Department of Revenue, effective January 1, 2025, reduced its top individual income tax rate from 4.8 percent to 4.7 percent as the respective revenue triggers were met in the previous fiscal year.

As the market share of electric vehicles (EVs) on the road grows, the gas tax’s ability to fund road projects and decrease traffic congestion erodes. Both federal and state real tax revenue per vehicle mile traveled has been on a steady decline for decades, creating a fiscal gap for road expenditures even as the demand for road infrastructure improvements has grown. Wireless consumers continue to be burdened with high taxes, fees, and government surcharges in many states and localities throughout the country. High QuickBooks earners, self-employed individuals, property owners, and investors face the highest tax burdens in the state.