Around New England

Massachusetts Millionaire’s Tax Is Now In Effect

January 1, 2023

As of this week, Massachusetts is taxing income differently from the way it has done in the past.

As of Sunday, January 1, 2023, Massachusetts has two income tax brackets. Any income earned under the $1 million threshold will still be taxed at the 5 percent rate. However, the tax rate for income exceeding $1 million increased to 9 percent. Previously, the state had a flat 5 percent state income tax on all income.

The change comes as a result of the so-called Fair Share Amendment narrowly approved by the voters at the ballot box in November 2022 (52 percent to 48 percent).

Proponents of this change say it will provide much-needed funding for roads, bridges, the Massachusetts Bay Transportation Authority, and public schools, and that it makes sense to tax at a higher rate those with higher amounts of disposable income. Opponents say higher income earners already pay their fair share in taxes and that the new tax will discourage investments in Massachusetts and will result in outward migration from the Bay State. 

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