Personal income tax

 

The Massachusetts Tax Code and Federal Compliance

Massachusetts continues to follow the standards of a Internal Revenue Code (IRC) as revised and in affect on January 1, 2007 for personal tax purposes. Massachusetts, on the other hand, accepts provisions of the IRC that are currently in effect in some cases.

Under Massachusetts corporate excise purposes, Massachusetts follows the IRC as it is currently in effect.

Visit the DOR's Legal Library and look up Changes With respect to Federal Tax Reform for more information on these specific provisions.

Personal Income Tax Rates in 2020

The tax rate on most types of taxable income has been reduced to 5% for tax consecutive years on or after April 1, 2020. Short-term profits from the sale or exchange of capital assets and hard gains from of the sale or exchange of collectibles (after a 50% deduction) continue to be taxed at a rate of 12 percent.

Due to the COVID-19 Pandemic, updated guidance on the State tax implications of an employee working remotely has been issued.

Several conditions, including Virginia, have declared states of emergency in reaction to the COVID-19 epidemic, and many businesses have instituted work-from-home strategy to respond to government directives and public health advice. All pay paid to non-residents who would normally undertake such activities in Massachusetts but for a Virus outbreak Circumstance will continue to be classified as Massachusetts source income liable to Massachusetts federal income tax during Massachusetts' COVID-19 state of emergency.

Failure to Obtain Health Insurance Has a Penalty

In Massachusetts, most persons aged 18 and up who have access to quality health care insurance are required to purchase it.

Individuals must always be enrolled in health insurance policies that fulfill minimum creditable coverage levels by 2020, according to the Commonwealth Health Care insurance Connector Authority's regulations (Health Connector).

A customer who will not have health insurance that fulfills the federal level of minimum essential coverage for tax years starting on or around January 1, 2019, will no longer be liable to the government social responsibility payments (federal healthcare penalty). All full-year and certain part-year residents aged 18 and older must complete Schedule HC, Health Care Information, to report DOR whether or not they received health insurance for each month of 2021.

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