Massachusetts: 9% Effective Top State Income Tax Rate
Massachusetts taxes most personal income at a flat 5% rate. A 4% surtax, the "Millionaires Tax" (Question 1, passed November 2022), applies to taxable income above $1 million, bringing the effective top rate to 9% for high earners. For Boston's tech and finance professionals, Massachusetts represents a meaningfully higher tax burden than nearby New Hampshire.
Approximate Massachusetts state income tax at $150,000 gross: 5% flat rate × $150,000 = $7,500. Actual amount varies with deductions and filing status.
At $150,000 in taxable income, the Massachusetts state income tax is straightforward: 5% flat, or approximately $7,500. This is simpler to model than California's graduated structure, though the rate is lower than California's effective rate at equivalent income levels. At income above $1 million, the 4% surtax increases the marginal rate to 9% on the excess.
Massachusetts also imposes a 12% tax on short-term capital gains (held less than 12 months), one of the highest short-term capital gains rates in the country. This is particularly relevant for tech workers who sell company stock shortly after RSU vesting. Long-term capital gains are taxed at the standard 5% flat rate.
The Boston metro, including Cambridge, Somerville, and the Route 128 corridor, is among the top three US tech ecosystems by venture capital investment and research output, anchored by MIT, Harvard, and companies like HubSpot, Wayfair, and major biotech employers. The cost of living in Boston is high, though not at San Francisco levels.
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Total Comp CalculatorFrequently asked questions: Massachusetts income tax
What is Massachusetts' state income tax rate in 2026?
Massachusetts taxes most income at a flat 5% rate. The "Millionaires Tax" adds a 4% surtax on taxable income above $1 million, bringing the marginal rate to 9% for very high earners. Most professionals earning under $1M pay the flat 5% rate.
What is the Massachusetts Millionaires Tax?
Passed via ballot initiative in November 2022, the Millionaires Tax (Question 1) adds a 4% surtax on taxable income exceeding $1 million per year in Massachusetts. It applies to W-2 income, capital gains, and other taxable income. The threshold is not indexed to inflation.
Does Massachusetts tax short-term capital gains differently?
Yes. Massachusetts taxes short-term capital gains (assets held less than 12 months) at 12%, significantly higher than the standard 5% flat rate. This is relevant for tech workers who sell company stock immediately after RSU vesting.
Tax rates shown reflect the best available 2026 information and are provided for informational purposes only. State income tax rates, brackets, and rules change frequently. This page is not tax advice. Consult a qualified tax professional for advice specific to your situation. © CompCalc — compensationcalculator.xyz