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Massachusetts State Taxes: What You’ll Pay in the 2026 Tax Season

Valerie Bauman,

Updated April 01, 2026

AARP

Published December 19, 2024

/ Updated April 01, 2026

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For most residents, Massachusetts has a flat individual income tax of 5 percent, but for those with income exceeding $1,083,150 in 2025, there is an additional surtax of 4 percent on the amount above that threshold. The state does have an estate tax, contributing to it being ranked among the worst 10 states in terms of tax competitiveness by the Tax Foundation. Additionally, certain capital gains are taxed at 8.5 percent.

The big picture:

Income tax: 5 percent flat income tax for most residents, plus a 4 percent surtax on any income exceeding $1,083,150 in 2025. Additionally, short-term capital gains income from the sale or exchange of capital assets is taxed at 8.5 percent, regardless of income.
Property tax: The statewide average was 1 percent, according to the latest data from the Tax Foundation. However, property tax rates vary by county.
Sales tax: 6.25 percent statewide.

How is income taxed?

For most residents, Massachusetts has a flat individual income tax of 5 percent, but for those with income exceeding $1,083,150 in 2025, there is an additional surtax of 4 percent on the amount above that threshold. Additionally, regardless of income, certain capital gains are taxed at 8.5 percent.

What about investment income?

Long-term capital gains are taxed at 5 percent, while short-term gains are taxed at 8.5 percent.

Are Social Security benefits taxed?

Massachusetts does not tax Social Security benefits.

How is property taxed?

The statewide average was 1 percent of a home’s assessed value, although property tax rates vary by county. The lowest was 0.27 percent in Nantucket County, while the highest was 1.41 percent in Hampden County. The lowest median property tax paid was $3,974 in Nantucket County, while the highest was $7,501 in Middlesex County.

What about sales and other taxes?

Sales tax: 6.25 percent. Only the state is allowed to impose additional sales tax, though some local governments may adopt local option excise taxes. Exemptions to the state’s sales tax include most groceries, newspapers, clothing less than $175 per item, tickets to sporting and amusement events, utilities and heating fuel, and other items and services. A complete list is available here.
Gas and diesel: Gasoline and diesel are both taxed at 24 cents per gallon.
Vehicle tax: 6.25 percent sales tax on vehicle purchases. Massachusetts also levies an annual excise tax on each vehicle at the rate of $25 per $1,000 of the vehicle’s value, as determined by each city or town’s database of valuation figures.
Alcohol: Massachusetts consumers do not pay sales tax on alcohol. However, additional sales tax on alcohol sold for on-site consumption at bars and restaurants is subject to the Massachusetts meals tax, as well as any local option meals tax if the local municipality has adopted one.
Lottery: Lottery winnings are taxed the same as other income, at 5 percent up to $1,083,150 in 2025, plus an additional 4 percent on anything above that. The state withholds 5 percent for state taxes on winnings of $600 or more. The state also withholds 24 percent for federal taxes on winnings of $5,000 or more.

Will my heirs or estate have to pay inheritance and estate tax?

The estate is taxed if the gross value of the decedent’s estate, plus adjusted taxable gifts, exceeds $2 million. Rates range from 0.8 percent to 16 percent, depending on the value of the estate. For estates of residents who died on or after Jan. 1, 2023, there is a credit of $99,600 to reduce the amount of the estate tax.

Are there any tax breaks for older residents?

Senior circuit breaker tax credit: Residents age 65 or older may be eligible for a refundable credit on their personal state income tax return. For tax year 2025, income for a single person can’t be higher than $75,000 for a single filer, $94,000 for a head of household or $112,000 for married couples filing jointly. The tax credit calculation is based on the actual real estate taxes paid on in-state residential property that the resident owns or rents and occupies as a principal residence. If you are a renter, 25 percent of your annual rent must exceed 10 percent of your total Massachusetts income for the tax year. The maximum credit amount for tax year 2025 is $2,820. If the credit a resident is owed exceeds the amount of the total tax payable for the year, residents will be refunded the additional amount of the credit without interest.
Age 65 or over exemption: Residents who are 65 or older by the end of the year are allowed a $700 exemption on their income taxes.

Are military pensions taxed?

U.S. military pensions are excluded from Massachusetts’s gross income and aren’t taxed by the state.

What is the deadline for filing taxes in 2026?

The deadline for filing your 2025 tax return is April 15, 2026.

More AARP Financial Resources

AARP Retirement Calculator Determine if you are saving enough to retire when — and how — you want.
AARP’s Social Security Calculator Figure out when to claim and how to maximize your Social Security benefits.
AARP Tax Tools Explore resources to help you calculate and prepare taxes.

Valerie Bauman is a journalist and author with two decades of experience working for publications, including Newsweek, Bloomberg and The Associated Press. Throughout her career, she’s covered politics and the law, including pharmaceutical litigation, mass torts and election law.