Massachusetts State Tax Help: Resolve State Tax Debt with Local Experts

Massachusetts imposes a 5% individual income tax on most income, plus a 9% surtax on income above $1 million (effective 2023), making it a significant tax state for high earners. The state sales tax is 6.25% with no local additions; Massachusetts exempts groceries, clothing under $175 per item, and prescription drugs, but applies the tax to most other retail goods. Corporate excise tax in Massachusetts includes both an 8% rate on net income and a property measure of 2.6 per $1,000 of taxable property; the combined effective rate for large corporations is higher than the nominal income rate. Payroll taxes require Massachusetts employers to withhold state income tax and submit Form M-941 monthly or quarterly depending on payroll size; the state also mandates paid family and medical leave contributions from both employers and employees. The Paid Family and Medical Leave (PFML) payroll tax is 0.88% of wages in 2024, split between employer and employee portions; late PFML deposits carry 10% penalties. Back tax debt in Massachusetts accumulates at 12% annual interest plus a 1% per month failure-to-pay penalty capped at 25%; the Department of Revenue can offset refunds, garnish wages, place liens, and revoke professional licenses. Self-employed professionals, tech workers with equity compensation, and real estate investors in the Boston area are frequently surprised by large Massachusetts tax bills. Massachusetts offers installment agreements and an appeals process through the Appellate Tax Board; the state runs periodic amnesty programs for older delinquent liabilities.