MASSACHUSETTS
Return to Retiree Tax Map
NICKNAME
The Bay State
BOTTOM LINE: MIXED TAX PICTURE
Despite its nickname of "Tax-achusetts," the Bay State offers some breaks to retirees. Massachusetts does not tax Social Security and most pension income. Other income is taxed at a flat rate of 5.3%. Massachusetts allows certain residents who are 65 or older to claim a refundable tax credit on their state income taxes to offset real estate taxes paid during the year on their principal home.
STATE SALES TAX
6.25%. Food, prescription drugs, fuel costs (gas, oil, electricity) and clothing costing up to $175 are exempt.
INCOME-TAX RANGE
Flat rate of 5.3% of federal adjusted gross income.
SOCIAL SECURITY
Social Security benefits are not taxed.
EXEMPTIONS FOR OTHER RETIREMENT INCOME
Civil-service and Massachusetts state and local government pensions are exempt. Also exempt: pension income from other state or local governments that do not tax Massachusetts public pensions.
PROPERTY TAXES
Property is taxed at the local level.
Tax breaks for seniors: Massachusetts allows certain residents who are 65 or older to claim a refundable tax credit on their state income taxes to offset real estate taxes paid during the year on their principal home.
INHERITANCE AND ESTATE TAXES
Massachusetts has no inheritance tax. Estates valued at more than $1 million are subject to an estate tax; tax rates range from less than 1% to 16%.
Visit RetirementLiving.com for a complete rundown of taxes in Massachusetts.
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