Massachusetts State Income Tax Withholding
Last Updated: January 2026
Overview
Massachusetts imposes a flat state income tax with an additional "millionaire's tax" surtax on high-income earners. The base rate applies to all taxable income, with an additional 4% surtax on income exceeding approximately $1.1 million (indexed for inflation).
2026 Tax Rates
| Taxable Income | Rate | Effective Rate |
|---|---|---|
| Up to $1,107,950 | 5.0% | 5.0% |
| Over $1,107,950 | 5.0% + 4.0% surtax | 9.0% |
Note: The $1,107,950 threshold is adjusted annually for inflation. The 4% surtax applies only to income above this threshold.
Deductions and Exemptions
Personal Exemption:
- Single: $4,400
- Married Filing Jointly: $8,800
- Each Dependent: $1,000
Massachusetts does not use a standard deduction system. Instead, taxpayers claim specific deductions on their annual return.
Special Considerations
Required State Form
Massachusetts requires Form M-4 (Employee's Withholding Exemption Certificate). While the federal Form W-4 may be used as a starting point, employees should complete Form M-4 to ensure accurate state withholding.
Millionaire's Tax (Surtax)
Massachusetts imposes a 4% surtax on taxable income exceeding the threshold (approximately $1.1 million, indexed annually). ProPay does not currently calculate the surtax in withholding. For employees whose income may exceed the threshold, consider requesting additional withholding on Form M-4 to cover the surtax liability.
FICA deduction
Massachusetts allows employees to deduct FICA taxes paid (up to a $2,000 annual cap) from gross wages before calculating state withholding. ProPay applies this deduction automatically.
No Local Income Taxes
Massachusetts does not permit local income taxes. Only state withholding is required.
Circular M
Massachusetts publishes Circular M annually with detailed withholding tables and instructions. Both percentage method and wage bracket tables are provided.
Electronic Filing
Employers must file and pay electronically if:
- Prior year withholding exceeded $10,000, OR
- Filing 11 or more W-2s
Reciprocal Agreements
Massachusetts has no reciprocal agreements with other states. All wages earned in Massachusetts are subject to withholding regardless of the employee's state of residence.