Taxes in Massachusetts
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Low sales taxes offer Massachusetts residents some relief, but most other fees levied by the state are higher than average. Below, we explain various Massachusetts state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.
For information regarding taxes in other states, see Retirement Taxes by State.
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Massachusetts Tax Rates
|State Sales Tax||6.25%|
|Avg State/Local Sales Tax||6.25%|
|Gas Tax||$0.24 per gallon|
|Diesel Tax||$0.24 per gallon|
|Cigarette Tax||$3.51 per pack|
|Effective Tax Rate:||5%|
|Social Security Tax||None|
|Federal Income Tax Deduction:||None|
Massachusetts State Taxes Explained
Massachusetts Sales Tax
6%, with no local taxes.
Massachusetts Income Taxes
Massachusetts has a flat rate of 5%. Starting in 2023, Massachusetts will add an additional 4% tax on taxable income over $1 million.
Massachusetts Property Taxes
The median home value in Massachusetts is $381,600, with an average property tax of $4,679. The effective rate is 1.23%.
A circuit breaker tax credit is available to homeowners and renters over the age of 65 whose homes are valued at $912,000 or less. The credit is based on real estate taxes paid on the principal residence. The 2022 income requirements are:
- $64,000 for single individuals who are not heads of household
- $80,000 for heads of household
- $96,000 for married couples filing jointly
The circuit breaker tax credit was $1,200 for the 2022 tax year and may be adjusted annually.
At the local level, seniors who are at least 70 years old may qualify for additional property tax credits based on Clauses 41, 41B, 41C or 41C½. Learn more about state property taxes here.
Massachusetts Retirement Taxes
Civil service and federal, state or local government pensions are exempt. Pension income from plans that do not tax pension income from Massachusetts public employees is exempt. Military retirement and Social Security benefits are exempt.
You can deduct medical or dental expenses greater than 7.5% of your federal adjusted gross income.
Massachusetts provides a $700 exemption for those over age 65 ($1,400 if married). A $2,200 exemption applies if the taxpayer or spouse is legally blind.
Massachusetts Estate and Inheritance Taxes
Massachusetts estate tax is levied on the gross estate plus adjusted taxable gifts, computed using the Internal Revenue Code. If this amount exceeds $1 million, it is taxed at a rate of 0.8% to 16%. Massachusetts has no inheritance tax.
For more information, visit the Massachusetts Department of Revenue.