Massachusetts State Income Tax Overview

The Department of Revenue for Massachusetts imposes a state income tax on individuals that is separate from the federal income tax imposed by the Internal Revenue Service (IRS).  Following are answers to frequently asked questions about state income tax in Massachusetts.

Who has to file Massachusetts state income tax?

The Massachusetts Department of Revenue defines filing requirements for residents, partial-year residents, and non-residents.

Residents

Individuals who are residents of Massachusetts for the entire year must file a state income tax return if they have Massachusetts gross income of $8,000 or more.  Massachusetts gross income includes income from all sources, even those that are not Massachusetts-based sources.

Partial-Year Residents

Individuals who are residents of Massachusetts for part of the year must file a state income tax return if they have Massachusetts gross income of $8,000 or more.  Massachusetts gross income includes income from all sources, even those that are not Massachusetts-based sources.

Non-Residents

Individuals who are not residents of Massachusetts for any part of the tax year must file a state income tax return if their gross income from Massachusetts sources exceeds $8,000 or their prorated personal exemption.

What is the tax rate for Massachusetts state income tax?

Massachusetts is one of the few states with a state income tax that uses a flat tax rate.  The tax rate in Massachusetts is 5.3% on most income, including salaries, wages, tips, commissions, interest, dividends, and most capital gains.  Some capital gains are taxed at 12%.

What credits are available to reduce the taxes I owe?

There are several credits available on Massachusetts state income tax for those who qualify.

Circuit Breaker Credit

The Circuit Breaker Credit is for qualified taxpayers aged 65 or older where all of the following are true:

  • You own or rent residential property in Massachusetts and occupy the property as your principal residence
  • Your real estate’s assessed value does not exceed $729,000
  • You are not the dependent of another taxpayer
  • Your filing status cannot be married filing separate
  • You do not receive a federal or state rent subsidy
  • Your total income does not exceed $52,000 if you are a single filer, $65,000 if you file as head of household, or $78,000 if filing jointly

The credit is equal to the amount by which your property tax payments in the current year, including 50 percent of water and sewer use charges, exceed 10 percent of your total income.  The credit may not exceed $980.

Earned Income Credit

The Earned Income Credit is available to certain low-income taxpayers who qualify for the federal Earned Income Credit allowed under the Internal Revenue Code on federal income tax.  This refundable Massachusetts credit is 15 percent of the federal credit.  The maximum credit allowed is $69.60 with no qualifying children, $464.10 with one qualifying child, $766.80 with two qualifying children, or $862.65 with three or more qualifying children.

When do I need to file my Massachusetts state income tax and is an extension available?

Massachusetts state income tax generally needs to be filed each year on the same date as when the federal income tax return is due.  As with the federal income tax return, a six-month extension to file may be obtained.  However, an estimate of any tax amount owed must be paid by the original state income tax return due date.

Who can help me prepare my Massachusetts state income tax return?

The information above is general in nature and should not be considered legal or tax advice.  If you have questions about or need help preparing your state income tax return, you should speak with a tax attorney who is familiar with Massachusetts state income tax laws.  Such an attorney will be able to review your specific situations to determine how the tax laws apply to you.

by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.