Once the extension is granted, the 6-month extension starts at the filing due date of the original return. An extension to file a return doesn’t extend the due date for paying any tax due. A legal claim by the Commonwealth that automatically arises on all property taxable in the Massachusetts estate on the date of death. Retirees who have worked for the state or local government in Massachusetts also benefit from tax-free income. This includes pensions from state government jobs, local municipalities, and other public institutions.
Are there different tax rates for different types of income in Massachusetts?
Although it is not required unless a business earns more than $100,000 in revenues per year, Massachusetts Department of Revenue prefers that corporations file online. Corporations must calculate both measures and pay the greater of the two or the minimum excise tax of $456, whichever is higher. Additionally, a corporate alternative minimum tax is not required in Massachusetts like it is in Maine and New Hampshire. Income resulting from businesses is taxed in just about every state, and Massachusetts is no exception. Form M-4868 is primarily used to make an extension payment and extend your filing deadline to October 15.
How do I determine what portion of my taxable income is subject to the 4% surtax?
The Child and Family Tax Credit (CFTC) provides $440 for each eligible dependent child under age 13, disabled dependent, or dependent aged 65 or over for 2024. Property owners undertaking lead paint removal may qualify for the Lead Paint Removal Credit, up to $3,000 per dwelling unit for 2024, which helps offset inspection and deleading costs. Seniors aged 65 or older who own or rent their primary residence may be eligible for the Senior Circuit Breaker Tax Credit, with a maximum of $2,730 for 2024, subject to income and property value limitations. Eligible seniors can receive a tax refund of up to $2,500 (as of 2024) through this credit. Willful tax evasion is a felony punishable by a fine of up to $100,000 for individuals or $500,000 for corporations and/or imprisonment of up to trial balance 5 years.
Is Massachusetts tax-friendly for retirees?
The credit is available only on income reported and taxed on a Massachusetts return. Corporate excise taxes must be filed by the 15th day of the third month following the end of the corporation’s fiscal year. Both foreign and domestic corporations in Massachusetts are usually subject to the corporate excise tax. Regardless of the type of business, any personal income received from a business must be included on the individual state return. In addition to corporate and personal taxes, some states apply a franchise or privilege tax to certain businesses for the right to do business in that state.
Foreign corporations with property or business activities in Massachusetts are subject to the excise tax even if headquartered elsewhere. Vermont and Maine apply a graduated system concerning rates; however, this application allows the taxes to rapidly exceed the 8 percent rate of Massachusetts. Massachusetts corporate tax is applied to the taxable earnings of corporations that do business or are located in the state. Whether you’re still considered a Massachusetts resident, moved out mid-year, or need to prove nonresident status, MyExpatTaxes helps ensure every detail is handled correctly. And if your situation is more complex, our tax professionals are available to guide you through the rules so you can file with confidence.
Massachusetts Income Tax Rates
If a pension is taxable in its home state, Massachusetts may tax it as well. Other important Massachusetts state tax return information and other related features (e.g. tax extension, amendment, etc.) are listed here as well. Taxpayers often grapple with choosing the exemption status that best aligns with their circumstances. Exploring this topic provides insight into how these choices impact both immediate take-home pay and end-of-year tax obligations. In most Suspense Account cases, you must pay estimated taxes to the state and federal governments.
- Most states don’t levy sales tax on goods that are considered necessities, such as food, medications, clothing or gas.
- Otherwise, Massachusetts can continue to treat you as a full-year resident and tax you on your worldwide income.
- An electronically filed return or report is considered timely filed if it’s electronically submitted (with all accurate required information) on or before the due date, before 12 a.m.
- Additionally, there are various exemptions and deductions available, which may help reduce the taxable amount of your income.
- This includes the taxable income of the individual that is reported on the composite return.
Can pass-through entities (PTEs) elect to pay a 9% PTE excise to take into account the 4% surtax?
Starting in 2023, anyone making over $1,000,000 will pay an additional 4.00% of state tax, bringing the total income tax rate up to 9.00%. If the employee can substantiate their travel or other reimbursable expenses, and they return to the employer any amount that exceeds the substantiated expenses, then these payments aren’t subject to withholding. Such payments must be identified either by making a separate payment or by indicating the separate amounts if both wages and expense allowances are combined in a single payment. If the employee doesn’t have to substantiate expenses or return excess payments, the payments must be included in the employee’s wages and are subject to withholding. Employers are responsible for collecting and sending employee withholding taxes to us.
The current Massachusetts income tax rates and the 4% surtax on income over $1 million are effective for the 2025 tax year. The surtax was first applied in the 2023 tax year and continues without change into 2025. There are no ma income tax rate announced changes for the remainder of the year as of July 9, 2025. There are no new changes to the income tax rates or brackets for 2025 beyond the existing structure. The state continues to use a flat tax system, with the surtax as the main exception for high earners.
