Enter your filing status on either Form 1 or 1-NR/PY, Line 1, and fill in the appropriate oval. Enter your spouse’s Social Security number in the appropriate space at the top of the return under taxpayer’s Social Security number. If you’re married filing joint, both spouses must sign the return.

Massachusetts: Federal EITC(Earned Income Tax Credits) Rates and Thresholds in 2022

• Taxpayers must consider the 4% surtax when determining the total amount of tax due on or before the return’s original due date to obtain an automatic extension of time to file the return.
• Most tax preparers can electronically file your return for you, or you can do it yourself using free or paid income tax software, like the examples listed below.
• State income tax rates receive relatively little attention compared with federal income taxes, but they can still put a large dent in your wallet.
• Massachusetts requires you to pay taxes if you’re a resident or nonresident who receives income from a Massachusetts source.
• Massachusetts voters approved the 4% surtax on November 8, 2022, in an amendment to Article 44 of the Massachusetts Constitution.
• All nonresident taxpayers with taxable income exceeding the surtax threshold must file a Form 1-NR/PY to report the 4% surtax, even if the nonresident otherwise participates in a composite return.
• Once you determine your taxable income for a tax year, you subtract the amount of the surtax threshold for that year.

The two most popular tax software packages are H&R Block At Home, sold by the H&R Block tax preparation company, and TurboTax Federal & State, sold by the Intuit software company. Both companies produce multiple editions for simple to very complex tax returns, so be sure to carefully compare the features offered by each package. Property taxes in Massachusetts are one of the most significant sources of revenue for local governments. In some counties, median property taxes paid exceed $6,000 per year. The median property tax bill in the state is $5,091 – one of the highest in the country. Estates seeking an extension of time to file and pay the estate tax must still request approval from DOR by filing Form M-4768.

Estimate your Massachusetts income tax burden

Residents who turned 65 before Jan. 1, 2024, can receive a $700 exemption on top of the state’s personal exemptions. This is per person (not household), so if your  spouse turned 65 by Jan. 1, they can also claim the exemption. If you are 65 or older before Jan. 1, 2024, you may be eligible for the Senior Circuit Breaker tax credit, depending on the taxes mass tax brackets or rent you paid on your principal residence.

• Condo owners are also entitled to a credit for repairs done to common areas in addition to the work done in their individual units.
• You can claim $1,000 or 15% of the net expenditure for the renewable energy source property, whichever is less.
• Most earners in the Bay State pay an income tax rate of 5 percent, though Massachusetts charges a surtax for income over $1 million starting with the 2023 tax year.The average property tax rate and the sales tax in Massachusetts fall in the middle of the pack across all states.
• In addition,  for taxable years beginning on or after January 1, 2022, a taxpayer must incur at least 75% of its production expenses in Massachusetts for a film project to qualify for the production expense credit, but a 50% threshold applies to prior taxable years.
• For tax year 2021, the IRS has calculated, based on inflation adjustments contained in IRC § 132(f) as effective on January 1, 2005, the 2021 monthly exclusion amounts of $275 for employer-provided parking and $140 for combined transit pass and commuter highway vehicle transportation benefits.
• Residents of Massachusetts are also subject to a penalty if they do not have health insurance coverage, which is paid through their tax return.

Tax Calculators

Note that this method applies regardless of whether the supplemental wage payment was made at the same time or separately from regular wages. Where income is otherwise included in a taxpayer’s taxable income, it is included for purposes of determining the 4% surtax. Likewise, income that is otherwise excluded from a taxpayer’s taxable income is excluded when determining the 4% surtax. Income that https://www.facebook.com/BooksTimeInc/ is exempt from Massachusetts tax, such as interest on federal and Massachusetts obligations, is not included in the 4% surtax determination.

• Effective for tax years beginning on or after January 1, 2021 and ending on or before December 31, 2025, the credit’s annual limit is increased from $20,000,000 to $40,000,000.
• Massachusetts generally follows the Internal Revenue Code (“IRC”) as currently in effect for Massachusetts corporate and financial institution excise purposes.
• There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state.
• Once you’ve filed your tax return, all you have to do is wait for your refund to arrive.
• Unlike the 6.25% sales tax, which is collected by sellers, use tax is generally paid directly to the state by the purchaser.
• Patriots’ Day is celebrated in Massachusetts on April 18, 2022, which moves the deadline for Massachusetts taxpayers to file 2021 income tax returns to the next business day of April 19, 2022.

Personal Income Tax

Generally, you need to pay at least 80% of your annual income https://www.bookstime.com/articles/reversing-entries tax liability before you file your return for the year. You pay through withholding and making estimated tax payments on any income not subject to withholding. Taxpayers affected by presidentially declared disasters in the United States automatically get an extension for filing returns and submitting tax payments.