The Millionaires Tax (Chapter 62F)
MA voters approved a 4% surtax on income above $1M in 2022, effective 2023. A $1.5M earner pays 5% on the first $1M + 9% on the next $500K, raising MA's effective top rate to 9% — comparable to NY. The threshold indexes annually.
Boston biotech and tech salary lift
Boston-area biotech and tech base salaries run 5–10% below Bay Area, but MA's flat 5% (below the $1M surtax) is much friendlier than CA's graduated 9.3%+ at the $200K–$500K band. Net take-home often favors Boston.
MA short-term gains penalty
Short-term capital gains (under 1 year) are taxed at 8.5% in MA — higher than the 5% rate on wages and long-term gains. Day-traders and active investors should factor this in.
FAQ
Who pays the MA 4% surtax?
Anyone with MA taxable income above $1M (2026 indexed threshold). The surtax applies only to income above the threshold, not the full amount.
Does MA tax retirement income?
MA exempts Social Security and US military pensions. 401(k) and IRA distributions are taxable at the flat 5% rate.
Does MA have local income tax?
No. MA cities and towns cannot levy a local income tax. The 5% (or 9% over $1M) state rate is your entire MA income tax bill.
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Last reviewed
June 2026. We re-check every figure on the platform on a rolling quarterly cycle.
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