Capital Gains Tax for Massachusetts (2026)
Massachusetts (MA) Key Facts
State Capital Gains Rate
5%
Taxed As
Ordinary income
Federal Rate Applies
Yes (0%, 15%, or 20%)
Long Term vs Short Term
Both taxed at state level
How This Calculator Works in Massachusetts
This calculator estimates your combined federal and Massachusetts capital gains tax. Enter your gain amount, holding period, and income to see your estimated tax.
Massachusetts Overview
Massachusetts taxes most income at 5% but imposes a 9% surtax on income over $1 million (including capital gains). Federal capital gains taxes also apply, with long-term rates of 0%, 15%, or 20% depending on income. The combined state and federal burden should be considered when planning asset sales or investment strategies.
How Massachusetts Compares
Massachusetts's capital gains rate of 5% compares to New York at 10.9% and Connecticut at 6.99%. State capital gains taxes significantly impact net investment returns.
| State | Top Rate | Notes |
|---|---|---|
| New York | 10.9% | New York has a capital gains rate of 10.9%. |
| Connecticut | 6.99% | Connecticut has a capital gains rate of 6.99%. |
| New Hampshire | 0% | New Hampshire has a capital gains rate of 0%. |
Massachusetts's capital gains rate of 5% compares to a national average of approximately 5.04%. This is below the national average.
Tips for Massachusetts Residents
- 1Massachusetts taxes most income at 5% but imposes a 9% surtax on income over $1 million (including capital gains).
- 2Federal long-term gains (held 1+ year) are taxed at 0%, 15%, or 20%. Massachusetts's state tax applies on top of the federal rate.
- 3Hold investments over one year to qualify for lower federal long-term rates rather than ordinary income rates.
- 4Tax-loss harvesting—selling losing investments to offset gains—reduces both federal and Massachusetts state capital gains tax.
- 5Consider the combined federal + state rate when planning large asset sales. The total can exceed 32.8% for high earners.