{"id":57046,"date":"2023-02-02T03:12:00","date_gmt":"2023-02-02T03:12:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=57046"},"modified":"2023-02-02T14:32:42","modified_gmt":"2023-02-02T14:32:42","slug":"mass-income-tax","status":"publish","type":"post","link":"https:\/\/businessyield.com\/bs-personal-finance\/mass-income-tax\/","title":{"rendered":"MASS INCOME TAX: Definition and Rates\ufffc","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"

Massachusetts provides tax deductions and credits to lower your tax payment, such as a rent and commuter deduction and tax credits for income tax paid to another state. Massachusetts’ income tax rate is 5.00%. Also, this rate applies to all taxable income. In this article, we talk more about the mass income tax rate, how to pay the tax online through Mass Tax Connect, and its tax refund for 2023.<\/p>

Read Also: MARYLAND INCOME TAX: Maryland Income Tax Rates & Refund<\/a><\/p>

Overview<\/span><\/h2>

Massachusetts does not have a standard deduction, although it does allow many of the same itemized deductions as the federal government, as well as a few more. Child care expenses, college tuition (if it exceeds 25% of Massachusetts adjusted gross income), certain commuter costs, rental payments (50% of rent up to $3,000), and student loan interest payments, for example, are all deductible to taxpayers.<\/p>

Massachusetts significantly relies on personal income tax to finance annual operating expenses, accounting for around 55% of all tax collections.  Meanwhile, the rate was reduced to 5% for the tax year beginning on or after January 1, 2020. Mass income has a flat tax, which means that all income of the same type must be taxed at the same rate, but other categories of income might be taxed differently. Certain short-term capital gains, for example, are taxed at 12%.<\/p>

It also offers a variety of credits (dollar-for-dollar tax offsets), including an earned income tax credit, a circuit breaker credit, and a solar, wind, and energy tax credit. Income, particularly from capital gains, can be a volatile source of revenue because it is so directly linked to economic performance. The state income tax is levied at a fixed rate of 5%. However, the sales tax is levied at 6.25%.<\/p>

Aside from these deductions, taxpayers can also claim a personal exemption to reduce their taxable income. However, Massachusetts levies a flat 5% tax on federal-adjusted gross income. (Note: Massachusetts voters will determine whether to impose an additional 4% tax on taxable income exceeding $1 million beginning in 2023 on November 8, 2022.)<\/p>

Mass Income Tax Rate<\/span><\/h2>

Massachusetts imposes a 5% personal income tax on anybody earning more than $8,000 in 2022, regardless of filing or residency status. You do not have to submit a Massachusetts tax return if you earned less than $8,000 in the fiscal year 2021. However, if you want to claim some tax credits, such as the Earned Income Tax Credit, you may choose to do so.<\/p>

Individual income taxes in Massachusetts are levied at a fixed rate of 5.00%. Massachusetts has a 5.00% flat income tax rate and a 6.25% flat statewide sales tax rate. The state’s income tax rate is one of just a few that has a flat rate. Massachusetts also imposes a corporate income tax of 8%. Massachusetts also has a state sales tax of 6.25 percent and no local sales taxes. In the 2023 State Business Tax Climate Index, Massachusetts’ tax regime ranks 34th nationwide.<\/p>

The tax code of each state is a complex system with numerous moving pieces, and Massachusetts is no exception. Massachusetts imposes a 5.0% tax on both earned (salaries, wages, tips, commissions) and unearned (interest, dividends, and capital gains) income for the tax year 2021. Massachusetts’ income tax rate is 5.00%. This rate applies to all taxable income. In Massachusetts, unlike the federal income tax, there are no tax brackets. State residents who want to contribute more to the state’s finances can also pay a higher income tax rate.<\/p>

Mass Income Tax Rate 2023<\/span><\/h2>

The following are the mass income tax rate(s) for 2022; but will be updated as soon as 2023 rates is released by the IRS<\/p>

#1. Sales Tax for Mass Income Rate<\/span><\/h3>