State Tax in Massachussetts

The state has two income tax rates – 5.3 per cent or 12 per cent – depending upon the type of income that is reported, according to Massachusetts taxation law.

The Tax Rates For Massachusetts Are as Follows -

  • The 5.3 per cent rate applies to wages, interest and dividends and long-term capital gains.
  • The 12 per cent rate applies to short-term capital gains, long and short term capital gains on collectibles and installment sales before 1996 that are classified as capital gain income.

Who Must File -

  • A full-year and/or part-year resident who has a Massachusetts gross income of at least $8,000 is required to file a state tax return.
  • In 2004, Massachusetts allowed same sex couples to be married. As a result, these couples can file state taxes as a couple.

Due Date -

  • Tax law in Massachusetts states income taxes are due and payable on the 15th of April. If that date happens to fall on a holiday or weekend, then the due date moves to the next business day. Filing on time prevents late filing penalties. If you are unable to pay the tax in full, be sure to file on time and pay what you can. You will be billed for the balance, plus any late payment penalties and interest.
  • An extension of time can be granted to military personnel who are serving in a combat zone or hospitalized as a result of combat injuries. This would give extra time to file and/or pay taxes due. No penalties or interest are charged during this time period.

There is a limited income credit available for taxpayers whose income falls below the specified filing threshold for their status. This is to help those whose income falls close to the no-tax status threshold and can result in a tax deduction. It is not available to married taxpayers who file separately and an earned income credit deduction for those whose income falls below a certain level.

A tax law know as the circuit breaker credit allows for persons who are 65 or older to receive up to $900 credit.

Pensions that are exempt from state tax in Massachusetts include income from contributory annuities, pensions, endowments or retirement funds of the Commonwealth of Massachusetts or the U.S. Government is exempt from taxation.

Also not taxed are social security benefits, railroad retirement, public welfare assistance, VA payments or workers compensation.

Some scholarships can be deducted from income if you are an eligible candidate for a degree.

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