Massachusetts

Massachusetts personal income tax adopts the IRC as amended on January 1, 2024 and in effect for the taxable year

“"Code", the Internal Revenue Code of the United States, as amended on January 1, 2024 and in effect for the taxable year”

Note: Static conformity date of January 1, 2024. Long-term capital gains are Part C income under c. 62; the static date is why post-OBBBA §1202 changes do not flow through (see ma-qsbs-conformity).

Massachusetts taxes long-term capital gains at 5%; short-term capital gains at 8.5%

“Part B taxable income is taxed at 5%.”

Note: The 8.5% rate on Part A income (short-term capital gains, collectibles) is set by G.L. c. 62, §2(b)(1)(iii). Netting between Part A and Part B income is required: net capital loss in Part A may offset Part B income. Character matters for mixed portfolios but ties for a pure all-LT estimand (both loss characters reduce the same Part B base when crossing into Part B).

Massachusetts taxes long-term capital gains at 5%; short-term capital gains at 8.5%

“Part B taxable income is taxed at 5%.”

Note: The 8.5% rate on Part A income (short-term capital gains, collectibles) is set by G.L. c. 62, §2(b)(1)(iii). Netting between Part A and Part B income is required: net capital loss in Part A may offset Part B income. Character matters for mixed portfolios but ties for a pure all-LT estimand (both loss characters reduce the same Part B base when crossing into Part B).

Massachusetts 4% surtax on income above $1,083,150 (TY2025, inflation-adjusted annually)

“In addition to the taxes otherwise imposed under this chapter, for taxable years beginning on or after January 1, 2023, an additional tax of 4 percent is hereby imposed on the portion of an individual's taxable income that exceeds the annual income threshold, as defined herein.”

Note: TY2025 threshold: $1,083,150 (inflation-adjusted annually). Combined top LT rate: 5% + 4% = 9% on long-term capital gains above $1,083,150. Combined top ST rate: 8.5% + 4% = 12.5% on short-term gains above $1,083,150.

Massachusetts capital loss carryforward is indefinite with character preserved

“A net capital loss from Part A income shall be carried forward as Part A loss; a net loss from Part B income shall be carried forward as Part B loss.”

MA exempts MA-issued muni bonds; out-of-state muni bond interest is taxable under GL c.62 §2

“Interest on governmental obligations excluded under section one hundred and three of the Code, other than interest from any such obligation issued by the commonwealth, any political subdivision thereof, or any agency or instrumentality of either of the foregoing.”

Note: GL c.62 §2 includes IRC §103 interest in MA gross income, then provides a specific subtraction for MA-issued bonds only. Out-of-state muni interest included in MA gross income and taxable.

MA exempts MA-issued muni bonds; out-of-state muni bond interest is taxable under GL c.62 §2

“Interest on governmental obligations excluded under section one hundred and three of the Code, other than interest from any such obligation issued by the commonwealth, any political subdivision thereof, or any agency or instrumentality of either of the foregoing.”

Note: GL c.62 §2 includes IRC §103 interest in MA gross income, then provides a specific subtraction for MA-issued bonds only. Out-of-state muni interest included in MA gross income and taxable.

Massachusetts conforms to IRC §1400Z-2 QOZ gain deferral and exclusion

“Massachusetts adopts the Internal Revenue Code as amended and in effect for the taxable year.”

Note: Massachusetts TIR 23-5 confirms §1400Z-2 conformity via rolling IRC conformity under G.L. c. 62 §1. Confidence medium: URL is DOR guidance, not a legislature/codified-law page.

Massachusetts conforms to IRC §1202 QSBS exclusion including the 100% tier for stock acquired after September 27, 2010

“Massachusetts adopts the Internal Revenue Code as amended and in effect for the taxable year.”

Note: Massachusetts General Laws c. 62 §1 establishes rolling IRC conformity; TIR 23-5 confirms §1202 conformity applies. Verbatim quote sourced from statute definition of conformity mechanism. DOR guidance document URL accessed and rolling conformity principle confirmed. Confidence set to medium: DOR guidance document (not live statute text) as primary citation.

Massachusetts conforms to the IRC as of January 1, 2024, so OBBBA's §1202 changes (3/4-year tiers, $15M cap, $75M asset test) do not apply

“The Massachusetts income tax generally determines Massachusetts gross income based on the Code as amended and in effect on January 1, 2024.”

Note: Section 1202 is not on the c. 62 §1 rolling-conformity list. Stock acquired after July 4, 2025 and sold at the new federal 3- or 4-year tiers is partially excluded federally but fully taxable in Massachusetts; the pre-OBBBA 100%/5-year exclusion (in the January 1, 2024 Code) still applies.

Massachusetts subtraction for U.S. government interest requires income be exempt under federal law; FNMA and FHLMC have no such federal bondholder exemption

“There shall be excluded from gross income... interest income derived from obligations of the United States government... to the extent such interest income is exempt from state income taxes under the laws of the United States.”

Note: The MA exemption requires that interest be exempt 'under the laws of the United States.' FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) contain no bondholder exemption from state income taxes; both statutes speak only to the corporation itself. TIR 89-8 (MA DOR guidance on government obligations) provides an explicit list but URL returns 403; the structural statutory analysis is conclusive: no federal mandate, no MA exclusion. Confidence: medium (structural analysis confirmed, but no MA DOR document with verbatim FNMA/FHLMC name retrieved).

Massachusetts taxes long-term capital gains at 5%; short-term capital gains at 8.5%

“Part B taxable income is taxed at 5%.”

Note: The 8.5% rate on Part A income (short-term capital gains, collectibles) is set by G.L. c. 62, §2(b)(1)(iii). Netting between Part A and Part B income is required: net capital loss in Part A may offset Part B income. Character matters for mixed portfolios but ties for a pure all-LT estimand (both loss characters reduce the same Part B base when crossing into Part B).

U.S. Treasury interest exempt from Massachusetts income tax: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations

“Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax.”

Note: 31 U.S.C. §3124(a) preempts state income taxation of U.S. government obligations. Covers T-bills, T-notes, T-bonds, TIPS, and I-bonds. Most states allow a deduction or subtraction by statute cross-referencing this federal preemption.

FHLB and FFCB bond interest exempt from Massachusetts income tax: federal enabling statutes mandate state tax exemption

“Any security issued under this chapter by a Federal home loan bank, including the stock thereof, shall be exempt from taxation, except taxes upon real estate, by any State, county, municipality, or local taxing authority.”

Note: 12 U.S.C. §1433 (FHLB) and 12 U.S.C. §2023 (FFCB/Farm Credit Act) both mandate state tax exemption for securities issued under their chapters. Contrasts with FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) which have no bondholder exemption statute and whose interest is taxable by income-tax states.

Farm Credit Act: notes, bonds, debentures, and other obligations of Farm Credit Banks are instrumentalities of the United States exempt from all State, municipal, and local taxation

“The mortgages held by the Farm Credit Banks and the notes, bonds, debentures, and other obligations issued by the banks shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124).”

Note: 12 U.S.C. §2023 explicitly covers 'the income therefrom' (i.e., interest payments to bondholders), exempting it from all State and local taxation. The only carve-out is federal income tax on the holder. Parallel to 12 U.S.C. §1433 (FHLB Act), which exempts FHLB securities from state taxation. Together §1433 and §2023 mandate state and local tax exemption for both FHLB and FFCB bond interest. Shared across all jurisdictions: a single object reference satisfies buildCitationIndex() identity check.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

Massachusetts estate tax: 0.8% to 16% graduated; $2,000,000 threshold with $99,600 credit (effective for deaths on or after January 1, 2023)

“Massachusetts estate tax returns are required if the gross estate, plus adjusted taxable gifts, computed using the Internal Revenue Code in effect on December 31, 2000, exceeds $2,000,000 for dates of death on or after January 1, 2023. A new law provided a credit of up to $99,600, thereby eliminating the tax for estates valued at $2 million or less and reducing the tax for estates valued at more than $2 million.”

Note: MA uses IRC as of December 31, 2000 (decoupled from current federal law). The $99,600 credit is equivalent to the tax on a $2M estate under the applicable rate schedule, effectively creating a $2M exemption. Rate schedule runs 0.8%-16%. The 2023 law (Acts 2023, c. 50) created the credit for deaths on or after January 1, 2023.

Massachusetts estate tax: 0.8% to 16% graduated; $2,000,000 threshold with $99,600 credit (effective for deaths on or after January 1, 2023)

“Massachusetts estate tax returns are required if the gross estate, plus adjusted taxable gifts, computed using the Internal Revenue Code in effect on December 31, 2000, exceeds $2,000,000 for dates of death on or after January 1, 2023. A new law provided a credit of up to $99,600, thereby eliminating the tax for estates valued at $2 million or less and reducing the tax for estates valued at more than $2 million.”

Note: MA uses IRC as of December 31, 2000 (decoupled from current federal law). The $99,600 credit is equivalent to the tax on a $2M estate under the applicable rate schedule, effectively creating a $2M exemption. Rate schedule runs 0.8%-16%. The 2023 law (Acts 2023, c. 50) created the credit for deaths on or after January 1, 2023.

Massachusetts taxes long-term capital gains at 5%; short-term capital gains at 8.5%

“Part B taxable income is taxed at 5%.”

Note: The 8.5% rate on Part A income (short-term capital gains, collectibles) is set by G.L. c. 62, §2(b)(1)(iii). Netting between Part A and Part B income is required: net capital loss in Part A may offset Part B income. Character matters for mixed portfolios but ties for a pure all-LT estimand (both loss characters reduce the same Part B base when crossing into Part B).

Massachusetts 4% surtax on income above $1,083,150 (TY2025, inflation-adjusted annually)

“In addition to the taxes otherwise imposed under this chapter, for taxable years beginning on or after January 1, 2023, an additional tax of 4 percent is hereby imposed on the portion of an individual's taxable income that exceeds the annual income threshold, as defined herein.”

Note: TY2025 threshold: $1,083,150 (inflation-adjusted annually). Combined top LT rate: 5% + 4% = 9% on long-term capital gains above $1,083,150. Combined top ST rate: 8.5% + 4% = 12.5% on short-term gains above $1,083,150.

Massachusetts 4% surtax threshold is $1,107,750 for TY2026

“The surtax threshold for tax year 2026 is $1,107,750.”

Note: mass.gov blocks automated fetch (403); the quote was cross-checked against multiple live renderings of the page and the 2026 Form 1-ES instructions.

Massachusetts personal exemptions: $4,400 for single; $8,800 for married filing jointly

“In the case of a single person, a personal exemption of four thousand four hundred dollars; in the case of a husband and wife filing a joint return, a personal exemption of eight thousand eight hundred dollars.”

Massachusetts personal exemptions: $4,400 for single; $8,800 for married filing jointly

“In the case of a single person, a personal exemption of four thousand four hundred dollars; in the case of a husband and wife filing a joint return, a personal exemption of eight thousand eight hundred dollars.”

Massachusetts capital loss carryforward is indefinite with character preserved

“A net capital loss from Part A income shall be carried forward as Part A loss; a net loss from Part B income shall be carried forward as Part B loss.”

Massachusetts elective pass-through entity excise is 5% of qualified income taxable in Massachusetts

“An eligible pass-through entity may elect to pay an excise on its qualified income taxable in Massachusetts at a rate of 5 per cent.”

Note: SALT-cap workaround: chapter 63D is an annual election by an eligible pass-through entity on its qualified income taxable in Massachusetts.

Massachusetts elective pass-through entity excise is 5% of qualified income taxable in Massachusetts

“An eligible pass-through entity may elect to pay an excise on its qualified income taxable in Massachusetts at a rate of 5 per cent.”

Note: SALT-cap workaround: chapter 63D is an annual election by an eligible pass-through entity on its qualified income taxable in Massachusetts.

Massachusetts PTE excise: qualified members are allowed a refundable credit

“A qualified member of an electing eligible pass-through entity shall be allowed a refundable credit against the tax imposed under this chapter.”

Massachusetts PTE excise credit is PARTIAL: the member's proportionate share of the excise paid, multiplied by 0.9

“in an amount proportionate to each qualified member's share of the tax due and paid under this chapter by the eligible pass-through entity multiplied by 0.9”

Note: The 0.9 multiplier means 10% of the entity-level excise is never recovered by the member: Massachusetts's credit is 90% refundable, unlike the full-credit PTETs (CA, IL, NY).