Income Tax Rates (MA)
Income is cassified into three groups, 5.3% income, 12% income and long term capital gain income.
5% Income (MA)
• Wages, salaries, tips, foreign employment
• Pensions annuities, state pensions
• IRA/KEOGH and Roth IRA distributions
• Taxable interest and dividends
• Alimony received
• Business, professional, trade and farm income
• Income or loss from rental real estate
• Partnership and S corp income or loss
• Trust income or loss
• Royalty and REMIC income or loss
• Unemployment compensation
• Winnings, jury duty pay, prizes, awards
• Forgiveness of debt
• Mortgage forgiveness
• Other income from US 1040 Line 21
12% Income (MA)
• Short term capital gains
• Long term gain on collectibles
Long-Term Capital Gain Income (MA)
Currently taxed at 5.3%
Additions to Federal Gross Income (MA)
Mass Gross Income includes:
• Municipal bond earnings NOT from MA.
• Employee contribution to MA pension plans.
• Foreign earned income.
Subtractions from Federal Gross Income (MA)
Mass Gross Income excludes:
• Interest earned from US obligations (US Savings Bonds & Treasury Bonds)
• Social Security or Railroad Retirement Income
• VA pensions and worker's compensation
• Contributory pensions from the US government and MA plans
• State or federal income tax refunds
• Income from annuities, pensions, IRA or KEOGH plans.
• Non-contributory military pensions or survivorship benefits.
• Amounts received by a firefighter or police officer incapacitated in the line of duty.
Residence Criteria (MA)
• Taxpayer's legal residence is in MA for the entire year, OR
• Taxpayer maintains a permanent residence in MA and spends more than 183 days in the state.
Part-Year Resident (MA)
An individual who either:
• Moves to MA during the year and becomes a resident, OR
• Moves out of MA during the year and establishes a residence outside the state.
Social Security Tax Deduction (MA)
A maximum of $2,000 per taxpayer may be deducted on MA Form 1.