State guides · MA

How Massachusetts taxes retirement income

Some 2026 figures pending confirmation  Tax year 2026 · research last updated October 2, 2026

At a glance

Tax rates

Brackets apply to Massachusetts taxable income. Other filing statuses are in the rules reference.

Social Security

Massachusetts doesn't tax Social Security benefits.

Pensions, IRAs and 401(k)s

Roth conversions

A Roth conversion counts as taxable income for Massachusetts. Whether a retirement income exclusion can cover part of it depends on the rules above.

Capital gains

Separate rates: Part A short-term capital gains (assets held one year or less) 8.5%; long-term gains 5% (Part C); long-term gains on collectibles 12% with a 50% deduction (effective 6%); interest and dividends 5% (Part A/B). The 4% surtax applies on top of all of these to total taxable income above $1,107,750 (2026), so short-term gains above the threshold are taxed at 12.5%. Net capital losses offset up to $2,000 of interest/dividend income; Part B/C excess exemptions rules apply.

Credits and relief for older residents

• Senior Circuit Breaker Credit (Schedule CB). Refundable. Age 65+ at close of year, owner or renter of MA principal residence. Credit = property tax (incl. water/sewer) paid, or 25% of rent, in excess of 10% of 'total income' (includes Social Security and other nontaxable income), capped at $2,820 (TY2025). TY2025 total income limits: $75,000 single, $94,000 head of household, $112,000 joint; homeowner's assessed value (before residential exemption) must not exceed $1,298,000. All thresholds COLA-indexed annually (TIR each fall).
• No Tax Status / Limited Income Credit. No tax if MA AGI (income incl. otherwise-exempt items per worksheet) is $8,000 or less (single), $14,400 + $1,000 per dependent (HOH), $16,400 + $1,000 per dependent (joint). Limited Income Credit phases the tax in for MA AGI between those levels and $14,000 (single) / $25,200 + $1,750 per dependent (HOH) / $28,700 + $1,750 per dependent (joint). MFS not eligible.

More detail from our research notes

Massachusetts builds its own gross income (it does not start from federal AGI) in three parts: Part A (interest/dividends 5%, short-term gains 8.5%), Part B (wages, pensions, IRA distributions, rents, etc., 5%) and Part C (long-term gains 5%, collectibles 12%). There is no standard deduction and no general itemized deduction; instead personal exemptions are subtracted from Part B income: single $4,400, MFS $4,400, head of household $6,800, joint $8,800 (i.e. $4,400 each, not indexed); +$700 per spouse age 65 or older on Dec 31 of the tax year (not the federal Jan 1 rule); +$2,200 per blind spouse; +$1,000 per dependent; medical/dental exemption = federal Schedule A line 4 amount if itemizing federally. Excess exemptions can be applied against Part A/C income. Other deductions: rent deduction (50% of rent up to a cap), up to $2,000 per person for Social Security/Medicare (FICA) or MA retirement contributions, charitable deduction. The 4% surtax (Mass. Const. amend. art. 44, 'Fair Share') applies to taxable income over $1,107,750 for 2026 ($1,083,150 for 2025); the threshold is the SAME for single and joint returns (not doubled) and is indexed annually. The MA $100/$200 bank-interest exclusion was repealed for 2024+. Private pensions, 401(k)/403(b)/457/TSP distributions and IRA distributions (above MA basis) are fully taxable at 5%; there is no age-based retirement exclusion.

Pending confirmation

These points were still being confirmed against Massachusetts's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

3 items

• Senior Circuit Breaker 2026 maximum credit, income limits and assessed-value limit (indexed, G.L. c. 62 s. 6(k)(4)) not yet published: the 2025 amounts ($2,820; $75,000 / $94,000 / $112,000; $1,298,000) are used for 2026. Expected in the annual TIR in late Oct 2026 (TIR 25-7 was Oct 24 2025), https://www.mass.gov/lists/technical-information-releases. The credit assumes the home is the principal residence and assessed under the limit, which the plan doesn't record.
• No Tax Status / Limited Income Credit amounts are from 2025 forms; statutory and not indexed historically; confirm on the 2026 Form 1 instructions (Jan 2027).
• Out-of-state government pension reciprocity list not captured (see mass.gov page linked in sources).

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

1. Rates: 5% ordinary, 8.5% short-term gains, 12% collectibles (50% deduction), 4% surtax thresholds 2024-2026 ($1,107,750 for 2026)https://www.mass.gov/info-details/massachusetts-tax-rates
2. 4% surtax explainerhttps://www.mass.gov/info-details/massachusetts-4-surtax-on-taxable-income
3. Personal exemption amounts, age 65 ($700, Dec 31 rule), blindness, dependents, medical, bank-interest repealhttps://www.mass.gov/info-details/massachusetts-personal-income-tax-exemptions
4. Seniors page: Social Security excluded, private pensions taxable, many government pensions exempt, circuit breaker 2025 max $2,820https://www.mass.gov/info-details/massachusetts-tax-information-for-seniors-and-retirees
5. Non-government pensions: IRA/Keogh/Roth conversion treatment, MA previously taxed contributions, 401(k) distributions taxablehttps://www.mass.gov/info-details/tax-treatment-of-non-government-pensions
6. Government pensions: federal and MA contributory pensions excluded; TSP and 457 taxablehttps://www.mass.gov/info-details/tax-treatment-of-government-pensions
7. TIR 25-7: 2025 circuit breaker thresholdshttps://www.mass.gov/technical-information-release/tir-25-7-annual-update-of-real-estate-tax-credit-for-certain-persons-age-65-and-older
8. No Tax Status / Limited Income Credit thresholdshttps://www.mass.gov/info-details/massachusetts-no-tax-status-and-limited-income-credit
9. Itemized-related items (group-d, 2026-10-02): 2025 Form 1 instructions line 2e (medical exemption = federal Sch A line 4, federal itemizers), Schedule Y line 9c (charitable deduction, Part B only, non-itemizers too), line 44 / Schedule CB instructions…https://taxsim.nber.org/historical_state_tax_forms/MA/2025/ma-dor-2025-inc-sch-cb.pdf
10. DOR Tax Rates page (updated Dec 30 2025): 4% surtax over $1,107,750 for TY2026 ($1,083,150 TY2025, $1,053,750 TY2024); no TY2027 figure yethttps://www.mass.gov/info-details/tax-rates
11. 2025 Form 1 instructions (local copy): line 11 Social Security/Medicare/retirement contributions up to $2,000 per person; line 14 rental deduction 50% of rent up to $4,000 ($2,000 MFS); No Tax Status $8,000 / $14,400 + $1,000 per dependent / $16,400 +…https://taxsim.nber.org/historical_state_tax_forms/MA/2025/ma-dor-2025-inc-form-1-inst.pdf

Taxtirement's Massachusetts calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

This page summarizes Massachusetts's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.