Solved: Massachusetts MA PFML taxation of Medical Leave

Perhaps office supplies, repairs on your office computers, building repairs, or even purchasing your workers’ suitable clothing for their job (e.g. a plumber should be wearing a boiler suit). While they are little things that not many people think about, your business thrives on these tiny details and therefore you are able to have tax deductions on them. Meanwhile, you may owe a Medicare surcharge if mass state income tax your income is high enough. If your filing status is single, head of household of qualifying widow(er), earnings in excess of $200,000 are subject to the 0.9% Medicare surtax, not matched by your employer. This threshold is $250,000 if you’re married and file jointly or $125,000 if you’re married and file separately. Massachusetts has a progressive state income tax system that ranges from 5% to 9%.

• As mentioned above, incomes that exceed this threshold are subject to a 4% surtax that was first instituted in 2023.
• For deaths after that date, only estates worth more than $2,000,000 are subject to tax.
• This is why you need to fill out a W-4 whenever you start a new job.
• If the due date falls on a Saturday, Sunday, or legal holiday, the return will be considered timely filed if filed by the next business day.
• DRS will contact you upon receipt of your return and will hold your return until you receive your ITIN and you forward the information to us.

While the state sales tax of 6.25% is among the nation’s highest, there are no local sales taxes levied in Massachusetts. If you’re a nonresident with an annual gross income that exceeds either $8,000 or the prorated personal exemption (whichever is less), you’re required to file taxes in Massachusetts. Your prorated tax exemption is your personal exemption adjusted for the percentage of your Massachusetts income compared to your total gross income from all sources. Massachusetts requires you to pay taxes if you’re a resident or nonresident who receives income from a Massachusetts source.

Tax Calculators

Federal retirement plans in the United States, such as 401(k), 403(b), SARSEP, and 457 plans, along with SIMPLE plans, offer valuable opportunities for individuals to save for their post-working years while enjoying certain tax benefits. These plans are designed to encourage long-term savings by providing tax advantages. Contributions made to these plans are typically pre-tax, meaning they are deducted from the employee’s gross income before taxes are calculated. This reduces the taxable income for the year, potentially leading to lower tax liabilities.

• Massachusetts has a progressive state income tax system that ranges from 5% to 9%.
• Similar to Hawaii, the cost of living is insanely high for a retiree, and most other income from retirement accounts is taxed.
• In Massachusetts, your employer will withhold money from your paychecks to put toward your state income taxes.
• While the state doesn’t tax social security or other retirement income, dividends and interest are taxed for the current tax year and will be repealed for taxable periods beginning after December 31, 2024.
• Massachusetts has some of the highest cigarette taxes in the nation.
• Using deductions is an excellent way to reduce your Massachusetts income tax and maximize your refund, so be sure to research deductions that you mey be able to claim on your Federal and Massachusetts tax returns.

Form CT‑1040ES is available on the DRS website at portal.ct.gov/DRS. If you fille this form, additional preprinted coupons will be mailed to you. Use Form CT‑1040ES, Estimated Connecticut Income Tax Payment Coupon for Individuals, to make estimated Connecticut income tax payments for 2024 by mail. If you made estimated tax payments by mail in 2023, you will automatically receive coupons for the 2024 taxable year in mid‑January. They will be preprinted with your name, address, and the last four digits of the SSN.

Massachusetts Estate Tax

The state of Alaska, one of the few states with no income or sales tax, also makes it to our list at number 17. If one perceives this year’s COLA as small, the anticipation for what 2025 holds may prove even more eye-opening. Based on current inflation data, The Senior Citizens Group estimates that Social Security benefits will increase by 2.4% by 2025 only. This revelation may come as a surprise to individuals unfamiliar with the mechanics of this adjustment.

That goes for both earned income (wages, salary, commissions) and unearned income (interest and dividends). While the state levies a 5% tax on income up to $1 million, income over $1 million is taxed at 9%. Residents of Massachusetts are also subject to a penalty if they do not have health insurance coverage, which is paid through their tax return. There is a three-month grace period for health coverage lapses, after which the penalty accumulates on a monthly basis, up to about $183 per month. Unlike other states, Massachusetts does not have a state standard deduction. Instead, state taxpayers can determine if they qualify for certain tax exemptions to reduce the amount of tax owed.