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The most significant taxes in Massachusetts are the sales and income taxes, both of which consist of a flat rate paid by residents statewide. The statewide sales tax rate of 6.25% is among the 20 lowest in the country (when including the local taxes collected in many other states). Until 2021, Utah was the only state that taxed Social Security benefits the same way that the federal government does. However, the state recently capitulated and now uses its own income-based tax credit system to offset Social Security income for single filers earning less than $30,000 and joint filers drawing less than $50,000.

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. Most food sold in grocery stores is exempt from sales tax entirely. Clothing purchases, including shoes, jackets and even costumes, are exempt up to $175.

Do I need to file taxes?

Those who earn more than those thresholds can still get a partial exemption on their benefits — the tax credit is reduced by 25 cents for each dollar above the income thresholds mentioned above, according to AARP. To qualify for the tax exemption, the purchase must be made during the sales tax holiday period by an individual for personal use with a total price of $1500 or less. Computers (including iPad) and computer accessories qualify for this tax exemption. The tax exemption applies to computers with a sales price of $3000 or less. Printers and flash drives for school use only with a sales price of $1000 or less qualify for this tax exemption. Any item with a sales price of $2500 or less qualifies for the tax exemption.

Massachusetts’s tax system ranks 34th overall on our 2023 State Business Tax Climate Index. To qualify for the sales tax holiday exemption, the purchase must be made during the sales tax holiday period. The exemption applies to computers with a sales price of $1000 or less. Related computer hardware, including accessories such as speakers, printers, keyboards, and mice, with a sales price of $500 or less also qualifies for this tax exemption.

Massachusetts sales tax rates by city.

Input the amount and the sales tax rate, select whether to include or exclude sales tax, and the calculator will do the rest. If you don’t know the rate, download the free lookup tool on this page to find the right combined Massachusetts state and local rate. Yonkers residents are subject to a Yonkers resident income tax surcharge that is computed and reported on their New York State tax return. All city residents’ income, no matter where it is earned, is subject to New York City personal income tax. Nonresidents of New York City are not liable for New York City personal income tax. 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.

Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. Massachusetts will require the payment of estimated taxes if you expect to owe more than $400 in taxes on income not subject to withholding. 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. An overpayment claimed on a return may be applied as a credit for your next year’s estimated tax 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.

States That Reduce Social Security Taxation Based on Age or Income

And because the price of most tax software packages includes preparation and filing for only one state, filing multiple state income tax returns often means paying extra. State income tax rates receive relatively little attention compared with federal income taxes, but they can still put a large dent in your wallet. How large depends on the amount you earn, as well as where you live and work. Here’s how it works, and a list of state tax rates across the U.S.

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. You may also qualify for certain what is massachusetts income tax rate personal income tax credits, which can reduce the amount of tax you owe. However, taxpayers who make less than $25,000 (single filers) and $32,000 (joint filers) can deduct all of their Social Security retirement income, according to SmartAsset.