Massachusetts State Income Tax: 2026 Rate, Millionaire’s Tax & Exemptions
Massachusetts keeps income tax simple — and then complicates it. The Bay State taxes almost everything at a flat 5%, has no standard deduction, and layers on a 4% “Fair Share” surtax that pushes the top effective rate to 9% on income over $1,107,750 in 2026. Add an 8.5% rate on short-term capital gains, and “flat” starts to feel relative.
This guide answers the questions Massachusetts taxpayers actually ask: how the 5% flat tax works, who pays the Fair Share surtax, what exemptions you can claim, and how MA stacks up against tax-free New Hampshire next door. Run your own numbers with the free Massachusetts income tax calculator.
What is Massachusetts’ income tax rate in 2026?
Massachusetts taxes most income at a flat 5% in 2026 — wages, business income, and long-term capital gains all use the same rate, with no brackets. However, short-term capital gains (assets held one year or less) are taxed at 8.5%, and income above $1,107,750 faces an additional 4% Fair Share surtax, for an effective top rate of 9%.
What is the Fair Share surtax (the “millionaire’s tax”)?
Voters approved the Fair Share Amendment in 2022, adding a 4% surtax on income above an inflation-adjusted threshold — $1,107,750 for 2026 (up from $1,083,150 in 2025). Only the dollars above the threshold are surtaxed, so the first $1,107,750 is still taxed at 5%. The surtax revenue is constitutionally dedicated to education and transportation. It applies identically to all filing statuses.
Does Massachusetts have a standard deduction?
No. Massachusetts is one of the few states with no standard deduction at all. Instead, you subtract only the personal exemption — $4,400 for single filers, $8,800 for married filing jointly, and $1,000 per dependent — before applying the 5% rate. That means a larger share of a middle-income earner’s income is taxable in MA than in states with generous standard deductions.
The practical effect: a single filer earning $80,000 owes tax on $75,600 of it, paying $3,780 — a 4.73% effective rate. Check your own figures with the Massachusetts income tax calculator.
How are capital gains taxed in Massachusetts?
Massachusetts splits capital gains in two. Long-term gains (assets held more than a year) are taxed at the standard 5%. Short-term gains (held one year or less) are taxed at 8.5% — the highest short-term rate of any flat-tax state. If you actively trade stocks or flip property, your Massachusetts bill can be much higher than the 5% headline suggests. The calculator on this site models wage income at 5%.
Does Massachusetts have local income taxes?
No. Massachusetts cities and towns do not levy income taxes, so the state return is the only income-tax filing most residents deal with. The tradeoff is property tax: Massachusetts has some of the highest effective property tax rates in the country, so your total state-and-local burden depends heavily on where you live and whether you own a home.
How does Massachusetts compare to New Hampshire?
The contrast is stark. New Hampshire has no tax on wages at all — just across the border. That makes southern New Hampshire one of the most popular “live in NH, work in MA” arrangements in America, though Massachusetts still taxes the wages of nonresidents who physically work in the state. For high earners, the gap is dramatic: a $1.5M earner pays roughly 9% on the top slice in MA versus 0% in NH.
Worked example: $80,000 salary (single, no dependents)
- Gross wages: $80,000
- Personal exemption (single): −$4,400
- Massachusetts taxable income: $75,600
- State tax (5% × $75,600): $3,780.00 (4.72% effective)
- Fair Share surtax: $0 — income below $1,107,750
- Local income tax: $0 — Massachusetts has none
Compare that with Arizona’s 2.00% effective rate at the same income — the absence of a standard deduction is the main reason. Verify your own numbers with the Massachusetts income tax calculator.
Frequently Asked Questions
Is the Fair Share threshold doubled for married couples?
No. The $1,107,750 surtax threshold is identical for all filing statuses in 2026 — married filing jointly does not get double the threshold. It is adjusted for inflation each year, so expect it to rise over time.
Does Massachusetts tax Social Security benefits?
No. Massachusetts fully exempts Social Security benefits from state income tax, and most pension income from Massachusetts and federal government employment is also exempt. Private pensions are generally taxable at 5%, though a limited exemption applies for some retirees.
What changed between 2025 and 2026?
The Fair Share surtax threshold rose from $1,083,150 to $1,107,750 with inflation, and the personal exemption amounts were adjusted upward ($4,400 single, up from prior years). The underlying 5% rate and the 8.5% short-term capital gains rate did not change.
When is my 2026 Massachusetts return due?
April 15, 2027. Massachusetts individual returns (Form 1) follow the federal deadline. Estimated quarterly payments are due if you expect to owe more than $400 beyond withholding — common for the self-employed and anyone with significant capital gains.
Should I move to New Hampshire to avoid MA income tax?
It depends on your situation. New Hampshire has no wage tax, but Massachusetts taxes nonresidents on income earned while physically working in MA — remote workers living in NH and working for MA employers generally owe MA tax on those wages. Property taxes in southern NH are also among the highest in the nation.
How do I estimate my Massachusetts tax for 2026?
Use the free Massachusetts income tax calculator, which models the 5% rate, personal exemptions, and the Fair Share surtax. Comparing New England states? The New York income tax calculator shows how MA’s flat system differs from a graduated one.
Estimates only — not tax advice. Verify with the Massachusetts Department of Revenue or a tax professional.