Massachusetts retirement taxes at a glance (2026)
| State income tax | Graduated, top rate 9%Massachusetts taxes most income at 5%, plus a 4% surtax on income above about $1.08 million ($1,083,150). |
|---|---|
| Social Security | Not taxedMassachusetts does not tax Social Security benefits. |
| Pensions | TaxedPensions from private employers are taxed at 5%. |
| 401(k) and IRA withdrawals | TaxedIRA, 401(k) and 403(b) withdrawals are taxed at 5% (9% above the surtax threshold). |
| Government pensions | Not taxedPensions from Massachusetts public employer systems, such as the Teachers' Retirement System, are exempt. |
| Military retirement pay | Not taxedU.S. military pensions are excluded from Massachusetts income. |
| Estate tax | Yes, above $2,000,000Massachusetts taxes estates above $2 million at rates from 0.8% to 16%, with a $99,600 credit. |
| Inheritance tax | No |
| Property tax help for seniors | The senior circuit breaker income tax credit for residents 65+ was up to $2,820 for tax year 2025, with income limits of $75,000 (single) and $112,000 (joint). Residents 65+ also get a $700 personal exemption. |
| Sales tax | Massachusetts has a 6.25% statewide sales tax. |
Recent changes and good to know
- The 4% millionaire surtax took effect in 2023; the threshold is indexed each year.
- Treatment of other states' government pensions depends on reciprocity and was not verified here.
How to lower your retirement taxes in Massachusetts
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in Massachusetts too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does Massachusetts tax retirement income?
Partly: Massachusetts exempts Social Security, military and Massachusetts public pensions but taxes private pensions, IRAs and 401(k)s.
Does Massachusetts tax Social Security?
Massachusetts does not tax Social Security benefits.
Does Massachusetts tax pensions?
Pensions from private employers are taxed at 5%.
Does Massachusetts tax 401(k) and IRA withdrawals?
IRA, 401(k) and 403(b) withdrawals are taxed at 5% (9% above the surtax threshold).
Does Massachusetts tax military retirement pay?
U.S. military pensions are excluded from Massachusetts income.
Does Massachusetts have an estate or inheritance tax?
Massachusetts taxes estates above $2 million at rates from 0.8% to 16%, with a $99,600 credit.
Sources (last verified 2026)
- Massachusetts State Tax Guide — AARP (2026-04-01)
- Massachusetts Retirement Tax Friendliness — SmartAsset (2025)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026-02-17)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.