Massachusetts State Income Tax in 2025: A Guide

Massachusetts keeps things straightforward for its taxpayers with a flat state income tax rate of 5% for most earners. This flat rate means you owe the same percentage regardless of your income.  

That simplicity makes filing your Massachusetts state income tax return easier than in states with tiered tax brackets, where different income levels are taxed at varying rates. However, in the state of Massachusetts, not all income is equal. Certain short-term capital gains are taxed at a rate of 8.5% and long-term capital gains from the sale of collectibles are taxed at a rate of 12%.  

Whether you are a full-time Massachusetts resident, a part-year resident, or a nonresident who  earns income in the Bay State, knowing how these tax rates impact you is vital for efficient tax planning. The following guide outlines what you need to know when filing Massachusetts state income taxes for 2024 (the taxes you file in 2025). 

Who has to file Massachusetts state income tax?

Anyone who earned $8,000 or more in gross income in Massachusetts during the tax year is required to file a state tax return. That applies to residents, part-year residents, and nonresidents with Massachusetts-sourced income. Even if you are not required to file a federal return, you still need to file a state tax return if you earn more than the threshold.

How Massachusetts residency impacts tax filing

Massachusetts has four residency statuses for tax purposes: resident, part-year resident, nonresident, and a combined nonresident and a part-year resident. Your residency status determines how much of your income the state of Massachusetts taxes. The table below explains each status, who qualifies, and how the state taxes income from each group. 

Residency status	Definition	How Massachusetts taxes income
Resident	You’re a resident if your home is in Massachusetts for the entire tax year or you maintain a home in the state and spend more than 183 days there during the year.	All income earned, no matter its source, is taxed.
Part-year resident	Part-year residents move into or out of Massachusetts during the tax year. For the nonresident period, there is no Massachusetts source income earned.	Only income earned while a resident is taxed.
Nonresident	Legal residence is not in Massachusetts for the entire year.	Only Massachusetts-sourced income is taxed.
Nonresident and part-year resident	Part-year residents move into or out of Massachusetts during the tax year. For the nonresident period, there is Massachusetts source income earned.	Income earned while a resident and Massachusetts sourced income earned while a nonresident is taxed.

Source: Massachusetts Department of Revenue

Other income tax considerations in Massachusetts

Massachusetts applies specific tax rules to different kinds of income, which might impact your overall tax liability. Common income tax considerations include the following: 

• Retirement and pension tax income: Most private pensions and IRA withdrawals are taxable, but many government pensions are exempt. 
• Investment income: Long-term capital gains from dividends and interest are taxed at 5%. Short-term gains from the sale or exchange of capital assets are taxed at 8.5%. Long-term gains from the sale of collectibles are taxed at 12%. Income over $1,053,750, is subject to a 4% surtax. 
• Social Security income: Massachusetts does not tax Social Security benefits. 
• Military income: Active-duty combat pay is excluded from Massachusetts gross income. Non-active duty service is taxable if you meet residency rules.

Massachusetts state tax deductions and credits

Massachusetts offers several state-specific deductions and credits to help reduce your tax burden. The table below lists key options you may have as you prepare your Massachusetts tax return: 

Tax credit/deduction	Description	Amount
Commuter Tax Deduction	Deduction for Massachusetts Bay Transportation Authority (MBTA) passes or work-related commuting costs exceeding $150.	Up to $750.
Deductions on Rent Paid	Deduction for rent paid on your primary residence in Massachusetts.	Up to 50% of rent, capped at $4,000.
Earned Income Tax Credit (EITC)	Refundable credit for low-to-moderate income working individuals.	40% of federal EITC; maximum federal EITC is $7,830 for 2024 tax year.
Senior Circuit Breaker Tax Credit	Credit for seniors whose property taxes or rent exceeds 10% of income.	Up to $2,730.
Child and Family Tax Credit	Credit for each qualifying dependent.	$440 per dependent.

Source: Massachusetts Department of Revenue

How to file Massachusetts state income tax

Massachusetts’s flat tax rate should make filing your state income tax return easy, but residency rules, deductions, and credits can sometimes complicate the process. TurboTax simplifies the process, whether you want to do your taxes yourself or get expert help.  

We help you find deductions and credits you qualify for in Massachusetts, and keep more of your hard-earned money. Get started filing your Massachusetts state income tax return today.