Massachusetts Income Tax Brackets 2024

Whether you’re a billionaire or a recent graduate, the tax rate applied to your income is the same. Massachusetts, much like other states, imposes its income tax. As a progressive tax system, the rate increases as your income grows. Remember that you’ll only pay a higher tax rate on income exceeding specific thresholds. Consequently, higher earners contribute more to the state’s tax revenue. Massachusetts offers tax deductions and credits to reduce your tax liability, including a rent and commuter deduction and a tax credit for taking care of a child or other dependent.

How does the 4% surtax on personal income tax withholding apply to supplemental wage payments, such as bonuses?

The state also has a flat statewide sales tax rate of 6.25%. The state’s income tax rate mass tax brackets is only one of a handful of states that levy a flat rate. As a taxpayer, you must make estimated payments if the expected tax due on your taxable income not subject to withholding is more than a certain amount.

Logistics Calculators

The most significant taxes in Massachusetts are the sales and income taxes, both of which consist of a flat rate paid by residents statewide. While the state sales tax of 6.25% is among the nation’s highest, https://www.instagram.com/bookstime_inc there are no local sales taxes levied in Massachusetts. Massachusetts requires you to pay taxes if you’re a resident or nonresident who receives income from a Massachusetts source.

• However, it’s important to keep in mind that not everyone pays the highest tax rate and that state income taxes don’t make up the full picture when looking at overall tax burden.
• To optimize your tax situation, consider contributing to tax-advantaged accounts like 401(k) plans and HSAs.
• In recent years there have been several federal acts that have had implications for the Massachusetts corporate and financial institution excise.
• Embarking on a new job in Massachusetts is exciting, but understanding your paycheck can be daunting.
• You can deduct any expenses that exceed $150; taxpayers who are married and filing jointly can deduct expenses above $150 for each person.
• These state income tax rates apply to income earned in 2024, which is reported on tax returns filed in 2025.

Hoosac Valley’s $23M Budget Passes Districtwide…

There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state. The tax is on the purchase or use of “tangible personal property.” This includes https://www.bookstime.com/articles/what-is-noncumulative-preferred-stock nearly any purchasable good, with some exceptions. When you pay more taxes (i.e., withholding taxes or estimated taxes) than the amount of taxes determined to be due an overpayment may be generated on your account. An overpayment may also be generated if you are entitled to a refundable credit that exceeds the amount of tax due. Additionally, when you file an amended return or an abatement application to reduce the amount of tax due, and you previously paid more than what is now shown as due, an overpayment may be generated.

How will I report the 4% surtax?

PPP loan borrowers subject to the corporate and financial institution excise should not include the amount of a PPP loan forgiven under § 1106(b) of the CARES Act, and a deduction is allowed for otherwise deductible expenses that are paid with the proceeds of a PPP loan that is forgiven. For taxable years beginning on or after January 1, 2021, newly-enacted MGL ch 63D provides for an elective excise on pass-through entities (PTEs), including partnerships, S corporations, and certain trusts. The excise is imposed at a rate of 5% on the amount of the PTE’s income that is subject to the Massachusetts personal income tax at the individual partner, shareholder, or beneficiary level.

States with flat income tax rates

This credit isn’t refundable, but if the credit exceeds the tax you owe, you can carry the excess forward for up to seven years. If you commute to work, you can deduct certain transportation costs such as tolls paid through an E-Z Pass MA account and the costs of weekly or monthly passes to the Massachusetts public transit system. If you need assistance, please contact the Massachusetts Department of Revenue. The mayor’s plan has garnered support from the city’s fire and largest police unions, with the respective union heads, Sam Dillon and Larry Calderone, testifying Thursday that their members live in the city and would feel the burden of a residential tax hike.