Massachusetts Tax Rates, Standard Deductions, Forms, and More

House Bill 2755, the tax and revenue portion of the budget, includes numerous tax increases. House Bill 1444, signed into law in April 2025, will expand eligibility for the state’s sales and use tax exemption for data centers. This law reduces from $500 million to $100 million the investment requirement for data centers to qualify for this exemption and allows indirect compensation paid by contractors to count toward meeting the $1 million annual compensation requirement. Additionally, Maryland will newly apply a 3 percent sales tax to select business-to-business ma state tax brackets services, including data and informational technology (IT) services. This surtax is particularly significant for individuals with fluctuating income, such as those selling real estate or businesses.

Wyoming Tax Changes Effective July 1, 2025

Massachusetts taxpayers can expect a stable state income tax Accounts Receivable Outsourcing structure in 2025. The state follows a flat tax system, meaning most residents pay the same percentage of their taxable income in state taxes. However, high earners should be aware of an additional surtax on income exceeding $1 million. At the annual classification hearing, mayors, city/town councils and boards of selectmen decide how to further distribute the tax levy. Generally, the communities that do so have done so for many years.

Where To Send Your Massachusetts Tax Return

The Massachusetts Department of Revenue is the best place to find the latest updates, forms, and guidance. 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 announced changes for the remainder of the year as of July 9, 2025. Massachusetts has always been known for its unique approach to state taxes, and 2025 brings some important updates that every resident, newcomer, and business owner should understand.

Foreign Earned Income Exclusion and Filing Taxes with Foreign Income

• The amount of tax you owe each year is calculated based on your gross income, which includes wages, interest, dividends, and other earnings.
• View how much tax you may pay in other states based on the filing status and state entered above.
• Maria must report both her U.S. and foreign income on her Massachusetts tax return.
• As the year 2025 approaches, the ever-evolving landscape of tax regulations beckons each taxpayer to…
• Massachusetts does not impose a separate state income tax on LLCs.
• For the tax year 2025, these adjustments ensure that the credit remains aligned with the current economic conditions, providing targeted support to eligible taxpayers.
• However, a Massachusetts estate tax return is required if the gross estate at death plus adjusted taxable lifetime gifts, computed using the Internal Revenue Code in effect on December 31, 2000, exceeds $1,000,000.

Senate Bill 35 discontinues the state property tax levies for the Kansas educational building fund and the state institutions building fund and instead finances these expenses with revenue from the state general fund, effective July 1. 219, enacted in March 2025, repealed the sunset provision previously applicable to the state’s special privilege tax on medical marijuana, which was set to expire July 1. As such, Arkansas will continue levying a special privilege tax of 4 percent on gross receipts from sales of retained earnings balance sheet medical marijuana.

• The additional wholesale tax will increase by 3 cpg, to 9.3 cpg on gasoline and 9.4 cpg on diesel.
• After accounting for all deductions, you’ll ultimately receive your net pay—the amount deposited into your bank account.
• Most long-term capital gains, as well as interest and dividend income, are taxed at the standard income tax rate of 5.00%.
• If the sum is equal to or less than the surtax threshold, the required personal income tax withholding amount is 5% of the supplemental wage payment.
• The taxation of LLC income is subject to individual income tax rates.

How to file Massachusetts state income tax

Effective July 1, 2025, the state will collect a tax of 30 cpg on gasoline and 31 cpg on undyed diesel to support transportation infrastructure projects. Most property tax changes take effect at the beginning of a new calendar rather than the beginning of a new fiscal year. However, Kansas will discontinue its collection of various state property tax levies as of July 1, 2025, and Washington’s estate tax will be made more progressive on that same date. Taxpayers and tax practitioners should independently verify which Code sections Massachusetts law now conforms to, as relevant to their filing positions.