Differences Between MA and Federal Tax Law for Personal Income

Besides income tax, you are also required to pay FICA taxes (Social Security and Medicare). By funding essential social programs, these deductions benefit Bakery Accounting both current and future generations. Notably, employees and employers share the responsibility of contributing to these programs.

What income must be reported on Form 1-NR/PY by a nonresident who participates in a composite return?

This differs from many other states’ approaches to personal income tax, which typically tax different portions of your income at different rates. Massachusetts does not have a standard deduction, but it allows many of the same itemized deductions as the federal government, as well as some ma tax bracket additional ones. When calculating your Massachusetts income tax, keep in mind that the Massachusetts state income tax brackets are only applied to your adjusted gross income (AGI) after you have made any qualifying deductions. 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. The 2025 tax rates and thresholds for both the Massachusetts State Tax Tables and Federal Tax Tables are comprehensively integrated into the Massachusetts Tax Calculator for 2025. This tool is freely available and is designed to help you accurately estimate your 2026 tax return.

• As of tax year 2023, personal income taxpayers must pay an additional 4% (4% surtax) on taxable income over the surtax threshold.
• In such cases, DOR expects to be lenient in its imposition of penalties for underpayment of withholding tax.
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• For the most part, this means that almost everyone will pay the same percentage of their income to the state.
• Newspapers, admission to cultural and sporting events, and most healthcare products are also exempt.
• Massachusetts keeps things straightforward for its taxpayers with a flat state income tax rate of 5% for most earners.

Federal Income Tax Tables in 2023

The Personal Exemption, which is supported by the Massachusetts income tax, is an additional deduction you can take if you (and not someone else) are primarily responsible for your own living expenses. Likewise, you can take an additional dependent exemption for each qualifying dependent (like a child or family member), who you financially support. Remember that Massachusetts may have very different deduction laws from the Federal Income Tax, so you may have to write a whole new list of deductions for your Massachusetts income tax return.

How To File Your Massachusetts Income Tax Return

The mechanism of FICA taxation involves a dual contribution system where both the employer and the employee contribute a set percentage of the employee’s income towards these programs. The tax is applied to wages, salaries, and other compensation within certain thresholds, which are adjusted periodically. The distinct components of FICA, namely Social Security and Medicare, each have specific rates and caps that determine the amount of tax levied. As such, FICA represents a critical element contribution margin of the United States’ approach to social welfare, providing foundational financial security and healthcare benefits that many Americans rely on. Aside from income tax, another federal withholding that applies to most workers in Massachusetts is Social Security tax. This is a federal program that provides retirement benefits and disability insurance for many workers.

Massachusetts Tax Tables 2025 – Tax Rates and Thresholds in Massachusetts

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. After accounting for all deductions, you’ll ultimately receive your net pay—the amount deposited into your bank account. Regularly reviewing your pay stubs ensures the accuracy of deductions and helps you grasp the impact of financial decisions on your take-home pay.

Massachusetts has two marginal tax brackets, ranging from 5% (the lowest Massachusetts tax bracket) to 9% (the highest Massachusetts tax bracket). Each marginal rate only applies to earnings within the applicable marginal tax bracket, which are the same in Massachusetts for single filers and couples filing jointly. The 2024 tax rates and thresholds for both the Massachusetts State Tax Tables and Federal Tax Tables are comprehensively integrated into the Massachusetts Tax Calculator for 2024. This tool is freely available and is designed to help you accurately estimate your 2025 tax return. Pre-tax deductions, such as contributions to retirement plans and Health Savings Accounts (HSAs), reduce your taxable income. We help you find deductions and credits you qualify for in Massachusetts, and keep more of your hard-earned money.