For tax year 2014, Massachusetts imposed a 5.20% tax on both earned income (salaries, wages, tips, commissions) and unearned (interest, dividends and capital gains.); certain capital gains are taxed at 12%. For tax year 2015, Massachusetts imposes a 5.15% tax.
An individual first calculates gross income which is income from whatever source derived including (but not limited to) the compensation for services, wages, pensions, business income, rents, royalties, dividends, interest, capital gains, alimony, annuities, etc.
Certain business and personal deductions as well as exemptions may reduce gross income to arrive at that income subject to tax.