Guide Personal Income Tax for Residents

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.

Introduction

5.1% personal income tax rate

Massachusetts has a 5.1% tax on both earned (salaries, wages, tips, commissions) and unearned (interest, dividends and capital gains) income. 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.

Yearly Tax Changes

Filing Requirements

Full-year residents

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.

Part-year residents

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.

Nonresidents

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.

Nonresidents use Form 1-NR/PY - Massachusetts Nonresident or Part-Year Resident Income Tax Return.

Filing Extensions

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.

Filing Status

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:

  • Single
  • 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.

Single

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.

Married

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:

  1. You and your spouse must be legally married as of the last day of the year, and
  2. 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:

  1. 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.
  2. You paid more than half the cost of keeping up a home for the year, and
  3. 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.

Exemptions

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
Adoption

You're allowed an exemption for fees you paid to a licensed adoption agency to adopt a minor child. 

The exemption is for:

  • The full amount of the fees paid during the taxable year, and
  • Includes fees you paid in the taxable year to an adoption agency for the adoption process of a minor child, regardless of whether an adoption actually takes place during the taxable year
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)
Blindness

$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) 
Dependent

$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:

  • A qualifying child, or
  • A qualifying relative
Enter number of dependents from your U.S. Form 1040 (Line 6c) or 1040A (Line 6c) into the box on your Form 1 (Line 2b) or Form 1-NR/PY (Line 4b)
Excess

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)
Medical/dental

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)

Benefits (Mass. and Federal Excluded Income)

Calculating Income

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:

  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
= Massachusetts AGI

Your Massachusetts taxable income is your Massachusetts adjusted gross income minus the following deductions:

Deductions

Personal income tax deductions decrease your taxable income, which means you owe less taxes. Deductions are generally related to your expenses, but not always.

Deduction Where to report
Abandoned building renovation Schedule C or E
Alimony paid Schedule Y, Line 3
Allowable excess trade or business Schedule C-2
Attorney fees and court costs Schedule Y, Line 9
Certain Business Expenses of National Guard and Reserve Members Schedule Y, Line 9
Certain Business Expenses of Qualified Performing Artist Schedule Y, Line 9
Certain Business Expenses of State and Local (Free-Basis) Government Officials Schedule Y, Line 9
Childcare Expenses for Child under Age 13 or Disabled Dependent or Spouse Form 1, Line 12
Claim of Right Schedule Y, Line 14
College tuition Schedule Y, Line 11
Commuter deduction Schedule Y, Line 15
Renting out personal property for profit Schedule Y, Line 9
Dependent Member(s) of Household under Age 12, or Dependents Age 65 or Older, or Disabled Dependents Form 1, Line 13
Depreciation Schedule C or E
Employee business expenses Schedule Y, Line 1
Gambling activities  
Health Savings Account (HSA) Schedule Y, Line 8 
Human organ donation Schedule Y, Line 16
Incapacitated firefighter or police officer income exclusion Schedule Y, Line 4
Jury duty pay remittance Schedule Y, Line 9
Medical Savings Account (Archer MSA) Schedule Y, Line 6
Moving expenses Schedule Y, Line 5
Nonresident and part-year resident  
Out-of-state employee contributory government pension Schedule Y, Line 13
Partnership and S corporation Schedule E
Penalty on withdrawing savings early Schedule Y, Line 2
Reforestation amortization and expenses Schedule Y, Line 9
Rent paid Form 1, Line 14
Repayment of supplemental unemployment benefits Schedule Y, Line 9
Section 179 expenses  
Self-employed health insurance Schedule Y, Line 7
Social Security (FICA) and Medicare Form 1, Line 11a and 11b, if MFJ
Federal student loan interest Schedule Y, Line 10
MA undergraduate student loan interest Schedule Y, Line 12
Trade or business expenses Schedule C or E
Income exclusion for U.S. tax treaties Schedule Y, Line 4

Key Actions for Deductions

Credits

You may also qualify for certain personal income tax credits, which can reduce the amount of tax you owe.

Credit Refundable? Carryover
Brownfields Tax Credit (BTC) No 5 years after
Certified Housing Development Tax Credit (CHDC) No 5 years after
Circuit Breaker Credit Yes None
Community Investment Tax Credit (CITC) Yes None
Conservation Land Tax Credit (CLTC) Yes None
Dairy Farmer Tax Credit Yes None
Earned Income Tax Credit (EITC) Yes None
Economic Development Incentive Program Credit (EDIPC) No 10 years after (or 5 years after, depending on circumstances)
Economic Opportunity Area Credit (EOAC) No 10 years after (or 5 years after, depending on circumstances)
Employer Wellness Program Credit (EWPC) No None
Farming and Fisheries Tax Credit No None
Film Incentive Tax Credit No 5 years after
Film Incentive Tax Credit (Payroll and production expense credits not used) Yes None
Historic Rehabilitation Tax Credit No None
Income Tax Paid to Another Jurisdiction Credit No None
Lead Paint Removal Credit No 7 years after
Life Sciences Company Credit No None
Life Sciences Company Credit - Alternative Refundable Amount Yes None
Limited Income Credit (LIC) No None
Low Income Housing Tax Credit (LIHTC) No None
Medical Device Credit No 5 years after
Repair or Replacement of Failed Cesspool or Septic System Credit (Title V) No 5 years after
Solar, Wind, and Energy Credit No 3 years after
Image credits:  Filing document (Shutterstock)

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