Bottom Line
Middle-Class Families: Not Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Not Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)
The Bay State is often called "Taxachusetts" – and there are some good reasons why it got that nickname. Massachusetts has a flat rate of 5% of federal adjusted gross income, which can result in some higher-than-average tax bills. Plus, starting in 2023, an additional 4% tax is imposed on income over $1 million.
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Property taxes also run high with a statewide median tax rate that's above average. Massachusetts has its own estate tax, too.
On the plus side, sales taxes in Massachusetts are on the low end. The state rate is 6.25%, but there are no local taxes to tack on.
Massachusetts Income Taxes
Massachusetts Income Tax Range
Massachusetts has a flat rate of 5% of federal adjusted gross income. (Note: On November 8, 2022, Massachusetts voters approved a constitutional amendment to add an additional 4% tax on taxable income over $1 million starting in 2023.)
Massachusetts Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Massachusetts Tax Breaks for Other Retirement Income
Income from contributory federal government, Massachusetts state, and Massachusetts local government retirement plans is exempt. Income from noncontributory military retirement plans is also exempt. In addition, a deduction is available for contributory pension income from other state or local governments that do not tax Massachusetts public pensions.
Railroad Retirement benefits are also exempt.
Massachusetts Sales Tax
6.25% state levy. No local taxes.
- Groceries: Exempt
- Clothing: Exempt if under $175
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Massachusetts Real Property Taxes
In Massachusetts, the median property tax rate is $1,115 per $100,000 of assessed home value.
Massachusetts Property Tax Breaks for Retirees
Massachusetts homeowners and renters who are 65 or older may qualify to claim a refundable "circuit breaker" tax credit on their state income taxes to offset real estate taxes or rent paid during the year on their principal home. For 2022, the senior's total income cannot exceed $64,000 for a single filer, $80,000 for a head-of-household filer, or $96,000 for married couples filing jointly. For homeowners, the value of the residence for 2022 cannot exceed $912,000. For 2022, the maximum credit is $1,200.
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.
Massachusetts Motor Fuel Taxes
Gasoline: 26.54¢ per gallon.
Diesel: 26.54¢ per gallon.
Massachusetts Sin Taxes
Cigarettes and little cigars: $3.51 per pack
Snuff: 210% of the wholesale price
Chewing tobacco: 210% of the wholesale price
Other tobacco products: 40% of the wholesale price
Vapor products: 75% of the wholesale price
Beer: $0.11 per gallon
Wine: $0.55 per gallon
Liquor: $4.05 per gallon
Alcohol sales are exempt from sales tax.
Marijuana: 10.75% excise tax; up to 3% local option taxes may also be due
Massachusetts Estate and Inheritance Taxes
Estates valued at more than $1 million may be subject to a Massachusetts estate tax. Tax rates range from 0.8% to 16%. There is an unlimited marital deduction for property left to a surviving spouse and an unlimited charitable deduction for property left to a qualified charity.
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