Retiring in Massachusetts: how your income is taxed
Massachusetts is less tax-friendly for retirees. On a typical retirement income it ranks #49 of 51 for the lowest state income tax.
The rules in Massachusetts
- Social Security: Social Security benefits are fully exempt from Massachusetts income tax, including the federally taxable portion.
- Pensions: Private pensions and annuities are taxed at the 5% flat rate, plus a 4% surtax on income over about $1.1 million. Government pensions are exempt: contributory pensions from Massachusetts and its cities and towns, U.S. federal contributory pensions (FERS and CSRS), and pensions from other states that exempt Massachusetts pensions in return.
- 401(k), 403(b) and IRA withdrawals: 401(k), 403(b) and IRA withdrawals are taxed at Massachusetts' 5% flat rate. Contributions you already paid Massachusetts tax on are generally not taxed again when you withdraw them.
- At 65 and older: Each filer 65 or older gets a $700 exemption.
Calculate your Massachusetts retirement taxes
State income tax in Massachusetts: $1,745 a year
In Massachusetts, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Massachusetts you'd pay about $1,745 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $63,919 (8.7% total).
Massachusetts ranks #49 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Massachusetts
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $345 | $90 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $1,745 | $1,490 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $4,745 | $4,490 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Massachusetts's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to Massachusetts in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Massachusetts come from (IRS migration data, 2022–2023).
- New York to Massachusetts
- Florida to Massachusetts
- New Hampshire to Massachusetts
- California to Massachusetts
- Connecticut to Massachusetts
- Rhode Island to Massachusetts
Frequently asked questions
Does Massachusetts tax Social Security?
Not taxed. Social Security benefits are fully exempt from Massachusetts income tax, including the federally taxable portion.
Does Massachusetts tax pensions?
Taxed. Private pensions and annuities are taxed at the 5% flat rate, plus a 4% surtax on income over about $1.1 million. Government pensions are exempt: contributory pensions from Massachusetts and its cities and towns, U.S. federal contributory pensions (FERS and CSRS), and pensions from other states that exempt Massachusetts pensions in return.
Does Massachusetts tax 401(k) and IRA withdrawals?
Taxed. 401(k), 403(b) and IRA withdrawals are taxed at Massachusetts' 5% flat rate. Contributions you already paid Massachusetts tax on are generally not taxed again when you withdraw them.
Is Massachusetts a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Massachusetts charges about $1,745 in state income tax, ranking #49 of 51 (lowest tax first).
Related
Sources: mass.gov, mass.gov (2), mass.gov (3), mass.gov (4), mass.gov (5). Rules reviewed .