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What is Massachusetts's income tax rate?

Massachusetts has a flat 5% income tax rate on most income, with a small personal exemption ($4,400 single, $8,800 MFJ). In 2023, voters approved a 4% surtax on income above $1 million, bringing the effective top rate to 9% — the highest in New England. Capital gains held less than 1 year are taxed at 8.5%, long-term gains at 5%.

What is MA PFML?

Massachusetts Paid Family and Medical Leave (MA PFML, effective 2021) provides up to 26 weeks of combined paid leave. Medical leave: up to 20 weeks at 80% of wages (up to $1,144/week). Family leave: up to 12 weeks. Funded by a 0.88% contribution split between employees (~0.34%) and employers (~0.54% for employers with 25+). Benefits are job-protected.

Does Massachusetts tax Social Security?

No — Massachusetts exempts Social Security benefits from state income tax. Most pension income from government sources is also exempt. IRA and 401k distributions are taxable. Capital gains are taxed at 5% (long-term) or 8.5% (short-term held under 1 year). Massachusetts also has a separate schedule for interest, dividends, and capital gains.

What is the Massachusetts millionaires tax?

Passed by voters in November 2022 and effective January 1, 2023: a 4% additional income tax on individual taxable income above $1,000,000 per year. Combined with the 5% base rate, income above $1M is taxed at 9%. Revenue is earmarked for education and transportation. The $1M threshold is not indexed to inflation, so it affects more people over time.