Mass Income Tax Rate Drops at Midnight

Fellow workers of the Berkshires--or anywhere in the Commonwealth--rejoice! The state is letting you keep more of your hard earned cash starting New Year's Day.

While the increase in the state's minimum wage from $12 to $12.75 an hour effective January 1 has been getting most of the press, this little nugget from the Mass DOR might have flown under the radar, unless your job duties include doing payroll.

In this just ending old tax year 2019, Massachusetts had a 5.05% tax on both earned (salaries, wages, tips, commissions) and unearned (interest, dividends, and capital gains) income. However, the tax rate was lowered to an even 5% for tax years beginning January 1, 2020, and after. Certain capital gains are taxed at 12%.

By my calculations, that results in an extra 5 bucks in your pocket for every $10,000 you make. Happy New Year to us! What are you going to do with all that swag?