Massachusetts Capital Gains Tax (2026)
Massachusetts taxes most long-term capital gains at 5% (rising to 9% on taxable income above $1,083,150), and taxes short-term capital gains at a higher 8.5% rate. Run your own numbers with the free capital gains tax calculator, which estimates federal, NIIT, and Massachusetts tax together.
In short: federal long-term rates of 0%, 15%, or 20% apply everywhere. Massachusetts adds state tax on top, at up to 9%.
How Massachusetts treats capital gains
Massachusetts taxes most long-term capital gains at 5% (rising to 9% on taxable income above $1,083,150), and taxes short-term capital gains at a higher 8.5% rate.
Sell within a year instead and Massachusetts taxes the same $25,000 gain at 8.5% ($2,125 of state tax), on top of federal ordinary rates. The one-year line matters twice here.
2026 Massachusetts income tax brackets
| Taxable income | Rate |
|---|---|
| $0 – $1,083,150 | 5% |
| Over $1,083,150 | 9% |
Thresholds apply to all filing statuses.
A worked example
Say you are a single filer in Massachusetts with $60,000 of taxable income who sells stock held over a year for a $25,000 long-term gain. Federal tax on the gain is $3,750 (all of it lands in the 15% bracket at this income; no NIIT applies below $200,000 MAGI). Massachusetts adds an estimated $1,250, for a combined $5,000, an effective 20.0% on the gain. These figures use the same math as the calculator, 2026 federal brackets per IRS Rev. Proc. 2025-32, and state figures from the Tax Foundation's State Individual Income Tax Rates and Brackets, 2026.
Frequently asked questions
Does Massachusetts tax capital gains?
Yes. Massachusetts taxes capital gains as ordinary income. Massachusetts taxes most long-term capital gains at 5% (rising to 9% on taxable income above $1,083,150), and taxes short-term capital gains at a higher 8.5% rate.
What will I pay on a long-term gain in Massachusetts?
Combined, our worked example ($25,000 long-term gain on $60,000 of income, single) comes to $5,000: $3,750 federal plus $1,250 Massachusetts tax, an effective 20.0%.
Do I still owe federal capital gains tax in Massachusetts?
Yes. Federal capital gains tax (0%, 15%, or 20% long-term, ordinary rates short-term, plus the 3.8% NIIT for high earners) applies no matter your state. The free calculator estimates federal, NIIT, and Massachusetts tax together.
More
- Every state's capital gains treatment
- Capital gains tax explained: short-term vs long-term
- Neighbors alphabetically: Maryland · Michigan
This page is general information, not tax, legal, or financial advice. Rates and rules can change and depend on your situation. Confirm details with a tax professional, the IRS, or your state's revenue department.
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