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Tips for Filing Massachusetts Personal Income Taxes

massachusetts state income tax

Residents who turned 65 before Jan. 1, 2023, can receive a $700 exemption on top of the state’s personal exemptions. This is per person (not household), so if your  spouse turned 65 by Jan. 1, they can https://www.bookstime.com/ also claim the exemption. If you are 65 or older before Jan. 1, 2023, you may be eligible for the Senior Circuit Breaker tax credit, depending on the taxes or rent you paid on your principal residence.

In other states, the top rate kicks in at a much higher level of marginal income. For example, the top rate kicks in at or above $1 million in California (when the “millionaire’s tax” surcharge is included), Massachusetts, New Jersey, New York, and the District of Columbia. The IRS granted relief for all Massachusetts taxpayers affected by Hurricane Lee.

How do I determine what portion of my taxable income is subject to the 4% surtax?

To get you started, here are five things to know about the ins and outs of Social Security taxes. (rr) California and Oregon do not fully index their top brackets. California pumps out the highest state gas tax rate of 77.9 cents per gallon (cpg), followed by Illinois (66.5 cpg) and Pennsylvania (62.2 cpg). As more and more states move away from throwback or throwout rules, those states that still impose these rules are becoming less attractive for businesses, which are incentivized to relocate their sales activities to non-throwback states. If you received unemployment benefits during 2022, you should receive a Form 1099-G, Certain Government Payments, showing the amount of unemployment compensation received.

massachusetts state income tax

In the Bay State, estates are taxed at rates ranging from 0.8 percent to 16 percent, depending on the value of the estate. Although the state still has a 6.25% sales tax on most physical items, there are a number of exemptions, including food, healthcare items, and more. If you filed on paper last year, now is a good time to make the change to e-file.

Other Jurisdiction Credit (OJC)

According to the IRS, your benefits may be taxable if the total of your combined income is greater than the base amount for your filing status. Eligible taxpayers in Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming will also be able to participate in the pilot as these states have no generally applicable state income tax. Washington has also chosen to join the integration effort as a partner for the state’s application of the Working Families Tax Credit. For the 2024 filing season, Direct File will serve as a pilot with a goal to learn both about the Direct File service itself and the needs of taxpayers who use it. (oo) Taxpayers with net income greater than or equal to $84,501 but not greater than $89,100 shall reduce the amount of tax due by deducting a bracket adjustment amount. The bracket adjustment amount starts at $460 for individuals with net income of $84,501 and decreases by $10 for every $100 in additional net income.

massachusetts state income tax

When you fill out a W-4 form, you indicate your marital status, state whether you’re exempt from income tax withholding and more. Your employer then uses that information to calculate how much to withhold from your earnings every pay period. This is why you need to fill out a W-4 whenever you start a new job. You should also fill one out anytime your filing status changes or you experience a big life change, like having a child. Starting with tax year 2023, personal income taxpayers must pay an additional 4% (4% surtax) on taxable income over $1,000,000, increased annually for inflation (surtax threshold). 62, §§ 4(d) and 5A, as amended by §§ 28 and 29 of the FY24 Budget.

Use Tax on Out of State Purchase Payments

You can learn more about how the Massachusetts income tax compares to other states’ income taxes by visiting our map of income taxes by state. The taxes on Social Security can be impacted by the cost-of-living adjustment (COLA). COLA increases can cause some recipients to move into a higher federal income tax bracket — particularly when inflation is high like it is now. (ll) For taxpayers with federal AGI that exceeds $150,000, the taxpayer will pay the greater of state income tax or 3 percent of federal AGI. (jj) The phaseout range for the standard deduction, personal exemption, and dependency exemption is $233,750 to $260,550. For taxpayers with modified Federal AGI exceeding $260,550, no standard deduction, personal exemption, or dependency exemption is available.

The payment dates for Massachusetts estimated taxes are April 15, June 15, Sep. 15 and Jan. 15. If you work in another state and your employer does business or has offices in Massachusetts, your employer will withhold money from your paycheck to cover the taxes in the state where you work (if that state has income taxes). Your employer will subtract that amount from the amount due in Massachusetts state taxes and withhold the difference to cover your Massachusetts liability, too.

Massachusetts Sales Tax

The tax relief postpones certain tax filing and payment deadlines that began Sept. 15, 2023, until Feb. 15, 2024. DOR provides guidance in TIR for Massachusetts taxpayers on automatic extensions of time for “affected massachusetts state income tax taxpayers” to file returns and submit payments of tax as the result of any disaster declaration. With estimated taxes, you need to pay taxes quarterly based on how much you expect to make over the course of the year.

  • For Married Filing Joint (MFJ) taxpayers with AGI below $25,500, the standard deduction is $8,500.
  • Starting next tax season, annual income above $1 million will be taxed at 9 percent.A personal income tax exemption allows a portion of Massachusetts filers’ salary to be deducted from the income tax they owe.
  • If you’re interested in our DOR News monthly newsletter, informative legal notices and tax filing season updates (to name a few) this is the list for you.
  • Top marginal rates range from Arizona’s 2.5 percent to California’s 13.3 percent.
  • If the estate has a gross value (before any deductions) over that level, a Massachusetts estate tax return must be filed.

Massachusetts has some of the highest cigarette taxes in the nation. The tax is $3.51 per pack of 20, which puts the final price of cigarettes in Massachusetts at around $10.00 per pack. There are two ways to be considered a full-time resident of Massachusetts.

Tax Resources

Learn what income is calculated and who should pay the state income tax on Mass.gov. The 4% surtax applies to all chapter 62 taxpayers, including individuals, trusts, estates, and unincorporated associations, that have taxable income exceeding the surtax threshold in a taxable year beginning with tax year 2023. 90% of taxpayers e-file their Massachusetts personal income tax return and receive their refund faster than if filed by paper.