Capital gains tax in Massachusetts
An effective 5%, on top of $15,000 of federal tax
- Effective state rate
- 5%
- Federal tax on the same gain
- $15,000
- Total, federal and state
- $20,000
- Rank among the 51 jurisdictions
- 36 of 51, cheapest first
The rule in Massachusetts
Massachusetts taxes a capital gain as ordinary income, at the same rates as wages — an effective 5% on the example below.
- Long-term gain is taxed at the ordinary 5% rate; short-term gain has its own 8.5% rate, and both pick up the 4% surtax above $1,107,750 of income.
- Collectibles and pre-1996 instalment sales are taxed at 12% in Massachusetts, which this does not model.
Tax year 2026, from Massachusetts DOR — Massachusetts tax rates.
Work out the tax on your own gain
Prefilled for Massachusetts. Change what you paid, what you sold for and your other income — the federal band a gain lands in depends on everything underneath it, which is why the income field matters.
More than one year is long-term and gets the lower rates. Exactly one year is short-term — the clock starts the day after you bought.
Wages, self-employment, interest — everything but this gain. It decides which capital gains bracket the gain lands in.
Adds that state's own treatment of the gain, which is not always its income tax rate.
- You keep
- $80,000.00The gain after every tax below.
- Capital gain
- $100,000.00
- Federal capital gains tax
- $15,000.00
- Federal rate on the last dollar
- 15%
- Net investment income tax
- $0.00The 3.8% surtax on investment income above $200,000 single or $250,000 joint.
- State tax on the gain
- $5,000.00
- Effective rate on the gain
- 20%
Assumptions
- One sale of a straightforward capital asset — shares, funds, crypto or investment property — by an individual US resident.
- The gain is stacked on your other taxable income, which is what decides the federal band.
- No main-home exclusion, depreciation recapture, collectibles rate, qualified small business stock, opportunity zone or 1031 exchange.
- State tax uses that state's rule for a gain allocated to it; a gain sourced to another state, or a part-year move, is not modelled.
- No local income tax: county in Maryland and Indiana, municipal in Ohio and Pennsylvania, city in New York.
| Band | Rate | Gain in this band | Tax |
|---|---|---|---|
| 0% band (to $49,450 of taxable income) | 0% | $0 | $0 |
| 15% band (to $545,500) | 15% | $100,000 | $15,000 |
| 20% band (above $545,500) | 20% | $0 | $0 |
| Massachusetts tax on the gain | 5% | $100,000 | $5,000 |
| Holding period | Total tax | You keep |
|---|---|---|
| Sold within a year — short-term | $32,064 | $67,936 |
| Held more than a year — long-term | $20,000 | $80,000 |
You have held this more than a year, so the long-term rates apply. The other row is what the same sale would have cost inside a year.
What a long-term gain costs in Massachusetts
A single filer with $100,000 of other income, selling an asset held more than a year, in the 2026 tax year. Federal tax is the 0/15/20% schedule; the surtax column is the 3.8% net investment income tax.
| Gain | Federal | 3.8% surtax | Massachusetts | Total tax | You keep |
|---|---|---|---|---|---|
| $10,000 | $1,500 | — | $500 | $2,000 | $8,000 |
| $50,000 | $7,500 | — | $2,500 | $10,000 | $40,000 |
| $100,000 | $15,000 | — | $5,000 | $20,000 | $80,000 |
| $250,000 | $37,500 | $5,700 | $12,500 | $55,700 | $194,300 |
| $500,000 | $76,920 | $15,200 | $25,000 | $117,120 | $382,880 |
| $1,000,000 | $176,920 | $34,200 | $50,000 | $261,120 | $738,880 |
How Massachusetts compares
State tax on the same $100,000 gain. Massachusetts ranks 36 of 51 jurisdictions, cheapest first.
Frequently asked questions
Does Massachusetts tax capital gains?
Massachusetts taxes a capital gain as ordinary income, at the same rates as wages — an effective 5% on the example below.
How much is capital gains tax in Massachusetts?
On a $100,000 long-term gain for someone earning $100,000, Massachusetts takes $5,000 — an effective 5%. Federal tax adds $15,000, for $20,000 in all.
Is short-term capital gain taxed differently in Massachusetts?
Yes. Massachusetts taxes short-term gains on their own schedule, higher than the rate on long-term gains.
How long do I have to hold something for the lower rate?
More than one year, federally. The holding period starts the day after you acquire the asset, so something bought on 10 March is long-term only if sold on 11 March the following year or later. Inside a year the gain is ordinary income at your income tax bracket, which for most people is 22% or 24% rather than 15%.
Do I pay Massachusetts tax on a gain if I moved away before selling?
Generally you are taxed by the state you were resident in when the gain was realised, and some states also tax gains sourced to property inside them however long you have been gone. A part-year move usually means allocating the gain between the two states. This page assumes a full-year Massachusetts resident.
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Capital gains tax in Massachusetts: Massachusetts taxes a capital gain as ordinary income, at the same rates as wages — an effective 5% on the example below. Source: https://www.calculateitnow.dev/massachusetts-capital-gains-tax