This guide has general information about Personal Income tax for Massachusetts residents. It is not designed to address all questions which may arise nor to address complex issues in detail. Nothing contained herein supersedes, alters or otherwise changes any provision of the Massachusetts General Laws, Massachusetts Department of Revenue Regulations, Department rulings or any other sources of the law.
For tax year 2018, Massachusetts had a 5.1% tax on both earned (salaries, wages, tips, commissions) and unearned (interest, dividends and capital gains) income. The tax rate was lowered to 5.05% for tax years beginning January 1, 2019, and after. Certain capital gains are taxed at 12%.
Everyone whose Massachusetts gross income is $8,000 or more must file a Massachusetts personal income tax return on or by April 15th following the end of every tax year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.
If you've made an error on a return you've already filed, file an amended return.
Key Actions for Introduction
Yearly Tax Changes
Before filling out your yearly personal income tax return, it's a good idea to check if there have been tax changes.
For 2018, there have been changes to:
- Filing Due Dates
- 2018 Personal Income Tax Rates
- Penalty for Failure to Obtain Health Insurance
- Annual Update of Circuit Breaker Tax Credit
- Employer-Provided Parking, Transit Pass, and Commuter Highway Vehicle Benefits Exclusion Amounts
- Changes Related to Federal Tax Reform
- Internal Revenue Code Provisions Massachusetts Adopts
- Internal Revenue Code Provisions Massachusetts Does not Adopt
Note: Prior year Massachusetts Personal Income tax law changes can be found within the Form 1 and Form 1-NR/PY instruction booklet for any given year.
Key Actions for Yearly Tax Changes
If you're a full-year resident with an annual Massachusetts gross income of more than $8,000, you must file a Massachusetts tax return.
You're a full-year resident if:
- Your home is in Massachusetts for the entire tax year, or
- Your home is not in Massachusetts for the entire tax year but you:
- Maintain a home in Massachusetts, and
- Spend a total of more than 183 days of the tax year in Massachusetts, including days spent partially in Massachusetts.
Full-year residents use the Form 1 - Massachusetts Resident Income Tax Return.
If you're a part-year resident with an annual Massachusetts gross income of more than $8,000, you must file a Massachusetts tax return.
You're a part-year resident if you:
- Move to Massachusetts during the tax year and become a resident, or
- Move out of Massachusetts during the tax year and end your status as a resident.
Part-year residents use Form 1-NR/PY - Massachusetts Nonresident or Part-Year Resident Income Tax Return.
If you're a nonresident with an annual Massachusetts gross income of more than either $8,000 or the prorated personal exemption, whichever is less, you must file a Massachusetts tax return.
You're a nonresident if you are neither a full-year nor a part-year resident.
Key Actions for Filing Requirements
You automatically get a 6-month extension to file your Massachusetts income tax return as long as you've paid at least 80% of the total amount of tax due on or before the due date, and you're filing:
- Form 1
- Form 1-NR/PY
- Form 2
- Form 2G
- Form 3
- Form 3M
- Form M-990T-62
- Form NRCR, or
- An estate filing Form M-706
Once it's granted, the 6-month extension runs from the original due date for filing the return. You can file your return anytime during the extension period. An extension to file a return doesn't extend the due date for paying any tax due.
Estates seeking a time extension to pay the estate tax must still request approval from DOR by filing Form M-4678. You can file Form M-4678 electronically.
If an extension payment is required to reach the 80% threshold, you should pay electronically. If you need to pay $5,000 or more to qualify for an extension, you must pay electronically.
Farmers or fishermen who miss the March 1 deadline will not be penalized if they file and pay by April 15. This penalty exception is explained on Form M-2210. If you qualify for this exception, include Form M-2210 with your tax return, whether you file electronically or on paper.
Taxpayers affected by presidentially declared disasters in the United States automatically get an extension for filing returns and submitting tax payments. The due date and payment date for returns and payments is extended for a specified period of time announced by the IRS unless we publicly announce otherwise. This extension covers filing tax returns, paying tax (including estimated tax), and filing tax extension forms with us.
Key Actions for Filing Extensions
For federal purposes, your filing status determines your income tax rate. For Massachusetts purposes, your filing status determines how many personal exemptions you're allowed. For federal purposes, there are 5 filing statuses:
- Married filing a joint return
- Married filing a separate return
- Head of household
- Qualifying widow(er) with dependent child
Massachusetts offers all but the qualifying widow(er) with dependent child. Generally, if you claim this status federally, you qualify for head of household for Massachusetts. View more detailed information on filing status here.
You can file as single, if at the end of the taxable year, you were:
- Unmarried, or
- Legally separated under a final judgment of the probate court
You cannot file as single if:
- Your divorce or separate maintenance decree is not final
- You have a temporary support order
- You and your spouse simply choose to live apart
If you get a judgment from the probate court that you're living apart from your spouse for justifiable cause, you may file a Massachusetts income tax return as single.
If you're legally married as of the last day of the tax year, you can file either jointly or separately. Massachusetts law does not recognize common law marriages. Same-sex couples can file as married, jointly or separately.
You can file as married filing joint if you meet these 2 conditions:
- You and your spouse must be legally married as of the last day of the year, and
- You and your spouse must have a Massachusetts taxable year that begins and ends on the same day
Taxpayers who are legally married as of the last day of the tax year can file as married filing separately.
If married taxpayers have a Massachusetts residency tax year that begins and ends on different days, they must file married filing separately, assuming each spouse is required to file.
Married filing separate taxpayers may only claim a maximum deduction of $1,500 each, unless a statement from the other spouse is provided, allowing 1 spouse to take more than the $1,500 deduction. The consenting spouse must sign the statement and list:
- Their name
- Their address
- Their social security number, and
- The amount of rental deduction taken by each spouse
Head of household
You may file as head of household if you meet all of the following criteria:
- You're unmarried or considered unmarried on the last day of the year. You're unmarried on the last day of the tax year if you're legally separated from your spouse under a divorce or separate maintenance agreement.
- You paid more than half the cost of keeping up a home for the year, and
- A qualifying person lived with you in the home for more than half the year
Qualifying widow(er) with dependent child
If your spouse dies during the tax year, and you and your spouse had a Massachusetts taxable year that began on the same day, you may file married filing jointly for the tax year in which your spouse dies.
Since Massachusetts does not have a filing status equivalent to the federal qualifying widow(er) with dependent child, you can file as head of household for 2 years after the year your spouse died. If you don't meet the head of household requirements in the 2 subsequent years, you would file as single.
Reporting on your original tax return
Enter your filing status on either Form 1 or 1-NR/PY, Line 1, and fill in the appropriate oval. Enter your spouse's Social Security number in the appropriate space at the top of the return under taxpayer's Social Security number. If you're married filing joint, both spouses must sign the return.
Key Actions for Filing Status
Personal income tax exemptions directly reduce how much tax you owe. Exemptions are generally related to your filing status and number of dependents you report on your tax return, but not always.
|Exemption||Description||Where to report|
You're allowed an exemption for fees you paid to a licensed adoption agency to adopt a minor child.
The exemption is for:
|Form 1 (Line 2f) or Form 1-NR/PY (Line 4f)|
|Age 65 or over||
$700 exemption for each taxpayer who is age 65 or over by the end of the tax year.If filing a joint return, each spouse may be entitled to a $700 exemption if each is age 65 or over on December 31st of the tax year.
|Form 1 (Line 2c) or Form 1-NR/PY (Line 4c)|
$2,200 exemption for each taxpayer or spouse who is legally blind at the end of the taxable year.You're legally blind for Massachusetts purposes if your visual acuity with correction is 20/200 or less in the better eye, or if your peripheral field of vision has been reduced to a 10-degree radius or less.
|Form 1 (Line 2d) or Form 1-NR/PY (Line 4d)|
$1,000 exemption for each dependent claimed who qualifies for a U.S. dependent exemption under the Internal Revenue Code. This exemption does not include your or your spouse.
Dependent means either:
|Enter number of dependents from your federal return into the box on your Form 1 (Line 2b) or Form 1-NR/PY (Line 4b)|
If your allowable exemption amounts are greater than your Total Income (Form 1, Line 10 or Form 1-NR/PY, Line 12), you can deduct the difference from the income you report on Schedule B and Schedule D.Complete the "Schedule B, Line 36 and Schedule D, Line 20" worksheet section (from page 11 of the Form 1 instructions or page 16 of the Form 1 NR/PY instructions) or calculate the exemption online.
|Enter the amount from Line 5 of the worksheet on Schedule B (Line 36), and enter the amount from Line 8 of the worksheet on Schedule D (Line 20).|
|Massachusetts bank interest||
$200 (if married filing jointly) or $100 (for all other filing statuses) for reporting Massachusetts bank interest.Massachusetts bank interest includes total amount of interest received or credited to deposit accounts (term and time deposits, including certificates of deposit, savings accounts, savings shares, and NOW accounts.)
|Form 1 (Line 5b) or Form 1-NR/PY (Line 7b)|
An exemption is allowed for federally allowed medical, dental and other expenses paid during the taxable year. Itemize deductions on your Form 1040 - U.S. Individual Income Tax Returns.If you itemize on U.S. Schedule A and have medical/dental expenses greater than 7.5% of federal AGI, you can claim a medical and dental exemption in Massachusetts equal to the amount you reported on U.S. Schedule A (Line 4).
|Amount from U.S. Schedule A, Line 4 on Mass Form 1, Line 2e, or Form 1-NR/PY, Line 4e|
|Personal||If you file a Massachusetts tax return, you're entitled to a personal exemption whether you can claim a personal exemption on your federal return or not. Your personal exemption amount depends on your filing status.||Form 1 (Line 2a) or Form 1-NR/PY (Line 4a)|
Key Actions for Exemptions
Benefits (Mass. and Federal Excluded Income)
Compensation, Injury, and Sickness Benefits
- Compensation for active service in a combat zone by members of the U.S. Armed Forces
- Court Awards and Damages
- Death Benefits
- Injury Benefits
- Life Insurance Policies/Premiums/Benefits
- Sick Pay
- Workers' Compensation
- Reporting claims on your original tax return
- Submitting an abatement or amended tax return
- Additional Resources
Employee Fringe Benefits
- Accident and Health Plans
- Adoption Assistance Programs
- Athletic Facilities
- Cafeteria Plans
- Child or Dependent Care Assistance Programs
- De Minimis (Minimal) Benefits
- Educational Assistance Programs
- Employee Discounts
- Employer Provided Vehicle
- Meals or Lodging Furnished for the Convenience of the Employer
- Military Fringe Benefits
- Moving Expense Reimbursement
- No-Additional-Costs Services
- Retirement Planning Services
- Transportation Fringe Benefits
- Working Condition Benefits
- Submitting an Abatement or Amended Return
- Additional Resources
To find out how much tax you have to pay, first calculate your Massachusetts gross income, which is income from whatever source derived including (but not limited to) the compensation for:
- Pensions, government and non-government
- Business income
- Dividends and interest
- Capital gains
|Calculating Massachusetts gross income|
|Federal gross income (Form 1, Line 10 or Form 1-NR/PY, Line 12 for part-year residents and nonresidents)|
|+||Income excluded from federal but included in Massachusetts|
|-||Income included in federal but excluded from Massachusetts|
|-||Income excluded from both federal and Massachusetts|
|=||Massachusetts gross income|
Next, calculate your Massachusetts adjusted gross income (AGI) to get your Massachusetts taxable income and find out if you qualify for No Tax Status (NTS) or Limited Income Credit (LIC).
|Calculating Massachusetts AGI|
|Federal gross income (Form 1, Line 10 or Form 1-NR/PY, Line 12 for part-year residents and nonresidents)|
|+||Schedule B, Line 35 (interest, dividends, and short-term capital gains)|
|+||Schedule D, Line 19 (long-term capital gains)|
|-||Schedule Y, Lines 1 - 10|
|-||Schedule B adjustments|
|-||Schedule D adjustments|
Your Massachusetts taxable income is your Massachusetts adjusted gross income minus the following deductions:
- Massachusetts deductions on Form 1 (Lines 11-14) and Form 1-NR/PY (Lines 11-16):
- Deductions on Schedule Y (Lines 11 – 16):
- Massachusetts personal income tax exemptions
Key Actions for Calculating Income
Personal income tax deductions decrease your taxable income, which means you owe less taxes. Deductions are generally related to your expenses, but not always.
Key Actions for Deductions
You may also qualify for certain personal income tax credits, which can reduce the amount of tax you owe.
Key Actions for Credits
Estimated Tax Payments
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. Generally, you need to pay at least 80% of your annual income tax liability before you file your return for the year. You pay through withholding and making estimated tax payments on any income not subject to withholding. Learn more.
Refunds and Credit of Overpayments
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 for that tax type. 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.
An overpayment claimed on a return may be applied as a credit for your next year’s tax due or you may request that it be refunded to you. An overpayment may also be offset or intercepted by the Department of Revenue and applied to another liability. However, often an overpayment is refunded directly to you.
Most refunds are claimed on an original return and will be issued automatically by the Department. For e-filed returns the turnaround time is about 4-6 weeks; but for paper returns it could take up to 10 weeks. You must claim your refund or credit within a certain time period, as further detailed below. Also, the Department of Revenue must issue refunds within a certain time period or pay interest on the amount of the refund. This page contains important information on the time limitations for claiming a refund and on the calculation of interest.
Visit Refunds and credit of overpayments to learn more.
Use Tax on Out of State Purchase Payments
Use tax is a 6.25% tax paid on out-of-state or out-of-country purchases that are used, stored or consumed in Massachusetts and on which no Massachusetts sales tax (or less than 6.25%) was paid.
Unlike the 6.25% sales tax, which is collected by sellers, use tax is generally paid directly to the state by the purchaser.
Individual use tax is due by April 15th of the following year after your purchase. Learn more.