Personal Income Tax for Residents

Multiply the current state taxable wages by the employee’s FICA rate (e.g., 7.65 percent for social security, 1.45 percent for Medicare-only) to obtain the current FICA contribution. Qualifying deductions might include an itemized deduction, the Massachusetts standard deduction, exemptions for dependants, business expenses, etc. Due to COVID-19, the Massachusetts Department of Revenue is waiving penalties related to self-assessed underpayment of estimated tax penalties on unemployment income.

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. The most significant taxes in Massachusetts are the sales and income taxes, both of which consist of a flat rate paid by residents statewide.

for Filing Extensions

Add the previous year-to-date retirement contribution computed in Step 5b to the current retirement contribution computed in Step 5d to obtain the new year-to-date retirement contribution. Add the current FICA contribution computed in Step 5c to the employee’s current contribution to all other retirement systems to obtain the current retirement contribution. Employee’s Federal Insurance Contribution Act rate (e.g., 7.65 percent for social security, 1.45 percent for Medicare-only) to obtain the previous year-to-date FICA contribution. This site is a free public service not affiliated with the IRS or any governmental organization.

• However, Massachusetts doesn’t charge an inheritance tax on estates after Dec. 31, 1975.
• Targeting a narrow demographic—the rich—allows for expanded tax revenue with less of the stigma of a general tax increase.
• Property taxes in Massachusetts are one of the most significant sources of revenue for local governments.
• She holds a bachelor’s degree from Tufts University and a master’s degree from Northwestern University.
• Changing one’s domicile is possible, but taxpayers should understand that they bear the burden of proving they have changed their domicile and that they would be well advised to consult with an attorney before making the move.
• Massachusetts full-year and part-year residents who have a principal residence within the state may qualify for the Solar, Wind and Energy Tax Credit.

Property taxes in Massachusetts are one of the most significant sources of revenue for local governments. In some counties, average property taxes paid exceed $4,000 per year. The state’s average effective property tax rate is 1.17%. Your filing status on your Massachusetts personal income tax can affect your exemptions you’re and how much you’re taxed.

Massachusetts Imposes Sales Tax on Glucose Monitors

Massachusetts voters approved a 4% tax on annual income above $1 million, on top of the state’s current 5% flat income tax. Complete and e-File your Massachusetts Income Tax Return on eFile.com along your Federal Tax Return. Find information on how to file a MA Tax Return only.Find information on Massachusetts income brackets and rates, standard deductions, and tax forms by tax year.

Taxpayers selling assets with payments made over time in installments may wish to trigger the gain in 2022. Taxpayers with certain eligible gains can also consider deferring and partially eliminating those gains by investing in qualified opportunity funds. Similarly, real estate investors could defer gain by entering Section 1031 like-kind exchanges for other real estate. Other taxpayers may also consider making transfers of income-producing assets to trusts that are domiciled outside Massachusetts. All of these strategies must be measured on a case-by-case basis, but it is fair to expect a flurry of year-end tax-driven transactions. Before the official 2022 Massachusetts income tax rates are released, provisional 2022 tax rates are based on Massachusetts’ 2021 income tax brackets. Once you’ve filled out your Massachusetts income tax return, you have several options for filing and paying your income tax.

Where To Send Your Massachusetts Tax Return

Generally, you need to pay at least 80% of your annual income tax liability before you file your return for the year. You pay through withholding and making estimated tax payments on any income not subject to withholding. To e-file your Massachusetts and Federal income tax returns, you need a piece of tax software that is certified for eFile by the IRS. While most in-depth tax software charges a fee, there are several free options available through the states, and simple versions are also offered free of charge by most tax software companies.

• With this service, we’ll match you with a tax pro with Massachusetts tax expertise.
• For e-filed returns the turnaround time is about 6 weeks; but for paper returns it could take up to 10 weeks.
• First, we calculate your adjusted gross income by taking your total household income and reducing it by certain items such as contributions to your 401.
• If your total itemized deductions are less than the standard deduction, the calculator will use the standard deduction.
• Other important Massachusetts state tax return information and other related features (e.g. tax extension, amendment, etc.) are listed here as well.
• For comparison purposes, however, your Massachusetts tax bracket is the tax bracket in which your last earned dollar in any given tax period falls.

Massachusetts individual income tax rate is flat, meaning, every resident is taxed the same percentage. This is different from other states, where your income tax percentage is based on upon filing status and income.

Some Massachusetts cities and towns also offer property tax “work-off” abatement programs, which allow seniors to do volunteer work for their local governments in exchange for a reduction of up to $1,500 on their property taxes. Senior homeowners age 60 or older must meet local program requirements to participate. On the plus side, sales taxes massachusetts state income tax in Massachusetts are on the low end. The state rate is 6.25%, but there are no local taxes to tack on. Property taxes also run high with a statewide median tax rate that’s above average. First, we calculate your adjusted gross income by taking your total household income and reducing it by certain items such as contributions to your 401.

• Enrolled Agents do not provide legal representation; signed Power of Attorney required.
• The state of Massachusetts requires you to pay taxes if you’re a resident or nonresident that receives income from a Massachusetts source.
• Massachusetts tax forms are sourced from the Massachusetts income tax forms page, and are updated on a yearly basis.
• An extension to file a return doesn’t extend the due date for paying any tax due.
• Massachusetts allows for other miscellaneous deductions, such as jury duty pay surrendered to your employer, some attorney fees and court costs for unlawful discrimination and other expenses.

This page contains important information on the time limitations for claiming a refund and on the calculation of interest. If you want to simplify payroll tax calculations, you can download ezPaycheck payroll software, which can calculate federal tax, state tax, Medicare tax, Social Security Tax and other taxes for you automatically. You can try it free for 30 days, with no obligation and no credt card needed. For most nonresident students, their Massachusetts source income will be limited to compensation from employment in Massachusetts.

Tax rate used in calculating Massachusetts state tax for year 2021

An overpayment may also be generated if you are entitled to a refundable credit that exceeds the amount of tax due. Additionally, when you file an amended return or an abatement application to reduce the amount of tax due, and you previously paid more than what is now shown as due, an overpayment may be generated. Personal income tax exemptions directly reduce how much tax you owe. Exemptions are generally related to your filing status and number of dependents you report on your tax return, but not always. Add the taxable biweekly fringe benefits (taxable life insurance, etc.) to the amount computed in step 2 to obtain the adjusted gross biweekly wages. 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.

Amy Sokolow is a general assignment and statehouse reporter for The Boston Herald, a position she started in June 2021. Prior to starting at The Herald, she was a reporter at The Lowell Sun, and previously reported for STAT News, The Boston Guardian, Native News Online, FierceBiotech and other publications. She holds a bachelor’s degree from Tufts University and a master’s degree from Northwestern University. She grew up on the North Shore, and will always say yes to a scoop of Richardson’s ice cream. Ballotpedia features 391,520 encyclopedic articles written and curated by our professional staff of editors, writers, and researchers. Click here to contact our editorial staff, and click here to report an error.