Massachusetts has three main taxes that affect your household: income tax at 5.0%, sales tax at 6.25%, and property tax that varies by town
Massachusetts taxes work differently depending on what you earn, what you buy, and where you own property. The state income tax is a flat 5.0% on wages, interest, and most other income. Sales tax is 6.25% statewide, though some cities add a local option tax on meals and hotel stays. Property tax is set by each city and town, so your rate depends entirely on where you live—it can range from under 0.8% to over 1.3% of your home's assessed value.
Understanding which taxes explore to you matters because they affect your take-home pay, what you spend at checkout, and your annual property bill. This guide explains how each one works and where to find your specific rates.
Key Takeaways
- Massachusetts income tax is 5.0% on wages, retirement income, and investment gains, with no local income tax added on top.
- Sales tax is 6.25% statewide, but some cities and towns add an extra 0.75% on meals and hotel rooms only.
- Property tax rates are set by your city or town assessor and vary widely—you can find yours by contacting your local assessor's office or checking your property tax bill.
- Certain income types, like Social Security and some retirement withdrawals, are not taxed by Massachusetts.
How Massachusetts Income Tax Works
The state income tax rate is 5.0% on most types of income: wages from your job, self-employment income, interest, dividends, and capital gains. This is a flat rate, meaning everyone pays the same percentage regardless of how much they earn. There is no progressive tax bracket system in Massachusetts—a person earning $30,000 pays 5.0%, and a person earning $300,000 also pays 5.0%.
Your employer usually withholds this tax from your paycheck automatically. If you are self-employed or have income without withholding, you may need to make quarterly estimated tax payments to the Massachusetts Department of Revenue. You can check your withholding or make payments through the state's online tax portal.
Some income is not taxed at all in Massachusetts. Social Security benefits are exempt, as are certain retirement distributions and municipal bond interest. If you receive a pension or withdraw from a traditional IRA, that income is taxable at the 5.0% rate.
Sales Tax and Local Meal Tax
The statewide sales tax is 6.25% and applies to most goods you buy in stores. Groceries, prescription medications, and clothing under $175 per item are exempt. Restaurant meals and takeout are taxable, but some cities and towns add an extra 0.75% local option tax on meals and hotel rooms—bringing the total to 7.0% in those places.
To learn about your city or town has a local meal tax, contact your city or town assessor's office or check the municipality's website. The tax appears on your receipt at checkout, so you will see the full rate applied when you pay.
Services like haircuts, car repairs, and plumbing are generally not subject to sales tax in Massachusetts, even though they are in some other states. Only tangible goods and prepared food are taxed.
Property Tax Rates by Town
Property tax in Massachusetts is set by each city and town, not by the state. Your assessor's office determines the assessed value of your home, and the town's tax rate is applied to that value. The rate varies significantly—some towns charge under 0.8% of assessed value per year, while others charge over 1.3%. A $400,000 home in a low-tax town might cost $3,200 per year in property tax, while the same home in a high-tax town could cost over $5,200.
To find your property tax rate, contact your city or town assessor's office directly. You can also look at your property tax bill, which shows your assessed value and the tax rate applied. Many towns post their rates online, and the Massachusetts Department of Revenue publishes a list of all municipal tax rates each year.
Property tax bills are usually sent twice a year, in the fall and spring. If you own a home, you will receive a bill showing the amount owed. If you rent, your landlord pays the property tax, though it is factored into your rent.
Tax Deductions and Credits Available in Massachusetts
Massachusetts offers several deductions and credits that can lower your tax bill. The Earned Income Tax Credit (EITC) is available to low- and moderate-income workers and is calculated based on your federal return. The Dependent Exemption allows you to deduct $215 per dependent from your taxable income (this amount changes yearly). If you are over 65 or blind, you may may have access to for an additional exemption.
Homeowners may be may be able to access for property tax relief programs depending on their age and income. The Residential Exemption can reduce your assessed property value by up to $125,000 in some towns. The Clause 41A program offers tax relief to seniors and disabled homeowners. Contact your local assessor's office to learn which programs explore in your town.
To claim these deductions and credits, you file a Massachusetts tax return even if you do not owe state income tax. The return is filed with the Massachusetts Department of Revenue, usually at the same time as your federal return.
Who Must File a Massachusetts Tax Return
You must file a Massachusetts return if you are a resident and your income exceeds the filing threshold. For 2024, the threshold is $15,000 for single filers and $30,000 for married couples filing jointly. Even if you do not owe tax, you should file if you had income withheld—you may be due a refund.
Non-residents who earned income in Massachusetts may also need to file, depending on the amount. If you worked in Massachusetts but lived in another state, contact the Massachusetts Department of Revenue to determine your filing requirement.
Returns are filed electronically through the state's tax portal or by mail. The important date is typically April 15, though you can request an extension. If you need help, the Department of Revenue offers a list of free tax preparation services for low-income residents.
Special Tax Situations in Massachusetts
Retirees should know that Massachusetts does not tax Social Security income, but it does tax distributions from IRAs, 401(k)s, and pensions at the 5.0% rate. If you are over 65, you may may have access to for an additional personal exemption that reduces your taxable income.
Self-employed people pay both the 5.0% state income tax and the self-employment tax (which funds Social Security and Medicare). You can deduct business expenses to lower your taxable income. If you have a home office, vehicle expenses, or supplies, keep records and report these on your state return.
If you own rental property in Massachusetts, the rental income is taxable at 5.0%. You can deduct mortgage interest, property tax, repairs, and other business expenses. Capital gains from selling property are also taxed at 5.0%.
Frequently Asked Questions
Is Massachusetts income tax the same for everyone?
Yes, the rate is a flat 5.0% for all residents, regardless of income level. There are no tax brackets—a person earning $40,000 and a person earning $400,000 both pay 5.0% on their taxable income.
What is not taxed in Massachusetts?
Social Security benefits are not taxed. Certain retirement distributions, municipal bond interest, and some military pensions are also exempt. Groceries and prescription medications are not subject to sales tax either.
How do I find my property tax rate?
Contact your city or town assessor's office—they can tell you the exact rate and your assessed value. You can also check your property tax bill, which shows both numbers. Many towns post rates on their websites.
Do I have to file a Massachusetts return if I do not owe tax?
You should file if you had income withheld or if you earned income above the filing threshold, because you may be due a refund or may have access to for credits like the EITC.
What is the difference between assessed value and market value?
Assessed value is what the town determines your property is worth for tax purposes—it is usually lower than market value. Your property tax is calculated on assessed value, not on what you could sell the home for.