Massachusetts does not tax Social Security or most government pensions, but it does tax private pensions, IRA withdrawals, and 401(k) income at a flat 5 percent. There's no general age break, so the source of your income decides the bill.
This guide covers how Massachusetts retirement income tax works, which pensions are exempt, and the surtax on high incomes.
In This Guide
- The Short Answer
- Massachusetts Retirement Income Tax at a Glance
- How Massachusetts Taxes Retirement Income
- Which Pensions Are Exempt
- The 4% Surtax on High Incomes
- What You Still Pay in Massachusetts
- Frequently Asked Questions
- Next Steps
The Short Answer
Massachusetts is a split state for retirees. It depends entirely on where your pension comes from.
Social Security is exempt. So are government pensions: pensions from the Commonwealth of Massachusetts and its cities and towns, the U.S. government, and the contributory plans of certain other states that give Massachusetts residents a reciprocal exemption, according to the Massachusetts Department of Revenue.
Private pensions, IRA withdrawals, and 401(k) distributions are taxable, at the state's flat 5 percent rate. There's no general age-based exclusion for private retirement income, so a 75-year-old with a corporate pension pays the same rate as a working 40-year-old.
Massachusetts Retirement Income Tax at a Glance
Here's how each common income source is treated at the state level.
| Income Source | Massachusetts State Tax | Notes |
|---|---|---|
| Social Security | Not taxed | Exempt |
| Massachusetts / local government pension | Not taxed | Exempt |
| U.S. government pension | Not taxed | Exempt |
| Reciprocal-state government pension | Not taxed | If that state exempts MA pensions |
| Private pension | Taxed at 5% | Flat rate |
| Traditional IRA withdrawal | Taxed at 5% | Taxable amount may differ from federal |
| 401(k) distribution | Taxed at 5% | Flat rate |
| Roth IRA (qualified) | Not taxed | Qualified distributions excluded |
The line runs between government and private. Government pensions and Social Security are out. Private pensions and retirement-account withdrawals are taxed at 5 percent.
How Massachusetts Taxes Retirement Income
Massachusetts applies a flat 5 percent income tax to taxable income, including private pensions, IRA withdrawals, and 401(k) distributions. There's no graduated bracket and no general senior exclusion to shrink the base.
One wrinkle matters for IRAs. The taxable amount of a Massachusetts IRA distribution can differ from the federal amount, because Massachusetts doesn't allow a deduction for IRA contributions. You already paid Massachusetts tax on the money you contributed, so the state doesn't tax it again on the way out. You recover your previously taxed contributions first, and only the earnings portion is taxed. This means your Massachusetts taxable IRA income is often lower than the federal figure, and the calculation takes some bookkeeping. Keep records of your contributions, or have your preparer track them.
Which Pensions Are Exempt
The exemption hinges on who pays the pension, not on your age or income.
Exempt government pensions include:
- Pensions from the Commonwealth of Massachusetts and its cities, towns, and political subdivisions
- Pensions from the U.S. government, including federal civil service and military retirement
- Contributory pensions from certain other states that give Massachusetts residents a reciprocal exemption
That last category is the one to check. A government pension from another state is exempt in Massachusetts only if that state exempts Massachusetts government pensions in return. The reciprocity list changes, so confirm your specific state pension with the Massachusetts Department of Revenue before assuming it's exempt.
What's not exempt: private-sector pensions, IRA and 401(k) withdrawals, and annuity income from private contracts. These are taxed at 5 percent regardless of your age.
The 4% Surtax on High Incomes
Most retirees won't hit this, but it's worth knowing. Massachusetts adds a 4 percent surtax on taxable income above $1,083,150 for tax year 2025. The threshold adjusts over time.
The surtax matters for retirees mainly in one-off years: selling a business, realizing a large capital gain, or taking a very large retirement-account distribution that pushes total taxable income over the threshold. In those years, income above the line is taxed at 5 percent plus the 4 percent surtax, for an effective 9 percent on the excess. Spreading large withdrawals across years can keep you under the threshold, so plan big distributions with your tax preparer.
What You Still Pay in Massachusetts
Beyond the state income tax, the usual taxes apply.
Federal income tax. The IRS taxes private and government pension income, traditional IRA and 401(k) withdrawals, and often part of Social Security benefits, regardless of Massachusetts exemptions.
Property and sales tax. Massachusetts property taxes are set locally and run high in many towns. Some municipalities offer senior property tax exemptions and a senior work-off program, and the state has a Senior Circuit Breaker income-tax credit tied to property tax or rent. The state sales tax is 6.25 percent, with groceries and prescription drugs exempt. See our senior property tax relief guide for how Massachusetts relief works.
For families weighing how retirement income covers care, start with our guide on how to pay for senior care, our framework for building a senior care funding plan, and our overview of retirement accounts for care.
Frequently Asked Questions
No. Massachusetts does not tax Social Security benefits. They may still be partly taxable on your federal return.
It depends on the source. Government pensions from Massachusetts, its localities, the U.S. government, and reciprocal states are exempt. Private pensions, IRA withdrawals, and 401(k) distributions are taxed at the flat 5 percent rate.
Massachusetts doesn't allow a deduction for IRA contributions, so you already paid state tax on the money you put in. You recover those previously taxed contributions first, and only the earnings are taxed, which often makes your state taxable IRA income lower than the federal figure.
No general one. Massachusetts has no broad age-based exclusion for private retirement income. A retiree pays the same 5 percent rate on a private pension as anyone else, though the Senior Circuit Breaker credit can help with property tax.
Filers with taxable income above $1,083,150 for tax year 2025 pay an extra 4 percent on the amount over the threshold. Most retirees never reach it, but a large one-time gain or distribution can trigger it.
Next Steps
- Check your pension's source. Government pensions are exempt; private ones are taxed at 5 percent.
- If you have a reciprocal-state pension, confirm reciprocity with the Massachusetts Department of Revenue before assuming it's exempt.
- Track your IRA contribution basis so you don't overpay state tax on withdrawals.
- If you expect a large one-time gain, plan around the 4 percent surtax threshold with your preparer.
- Map income against care costs. Read our guide to paying for senior care and retirement accounts for care.
Learn More
- How to Pay for Senior Care
- Building a Senior Care Funding Plan
- Retirement Accounts for Care
- Senior Property Tax Relief by State
Find personalized help planning retirement income for senior care at brevy.com.
The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.