Does Massachusetts Tax Retirement Income?

No. Massachusetts does not tax Social Security benefits.

Social Security benefits are not included in Massachusetts gross income, regardless of how much is taxed federally.

The Massachusetts answer is separate from the federal one. Depending on combined income, up to 85% of Social Security benefits can be taxable on the federal return regardless of what Massachusetts does, so the state rule changes the state line only. Our guide to states that do not tax Social Security shows where Massachusetts sits among the states that still tax benefits.

Partly. Massachusetts taxes some pension income, subject to an exclusion or age rule.

Income from most private pension and annuity plans is taxable at 5%. Distributions from Massachusetts contributory retirement systems and federal employee contributory pensions, including U.S. Postal Service pensions, are excluded because the contributions were taxed going in. Other states' government pensions are exempt only if that state offers reciprocal treatment.

There is no retirement-income exclusion. A taxpayer age 65 or older by December 31 gets an extra $700 personal exemption ($1,400 on a joint return if both spouses qualify), worth $35 per person at the 5% rate. The refundable Senior Circuit Breaker credit for property taxes paid (maximum $2,820 for tax year 2025, indexed) is the larger senior benefit.

Public and private pensions, annuities, and retirement-plan distributions do not always get the same treatment. The pension comparison lists which states exempt pensions broadly, partly, or only for certain plans.

Yes. Massachusetts generally taxes traditional 401(k) and IRA withdrawals.

401(k) withdrawals are fully taxable because the deferrals were excluded from Massachusetts wages. Traditional IRA withdrawals are taxable only after the Massachusetts previously taxed contributions have been recovered, since Massachusetts never allowed a deduction for IRA contributions. That basis tracking is the one break most out-of-state preparers miss.

Two timing points matter in Massachusetts. A Roth conversion is taxable in the year it is done, and Massachusetts starts from federal adjusted gross income, so a large conversion can land in a year when the state exclusion does not cover it. Qualified Roth withdrawals later are generally not taxable at either level. Required minimum distributions follow the same Massachusetts rules as any other traditional-account withdrawal.

Every state page on this site runs the same retiree profile so the states can be compared: $30,000 of Social Security, $40,000 withdrawn from a traditional 401(k), and a $20,000 private pension, $90,000 in total.

A single 68-year-old with $30,000 of Social Security, $40,000 from a 401(k), and a $20,000 private pension excludes the Social Security entirely and reports $60,000 of Massachusetts Part B income. At the 5% rate, the state tax is roughly $2,700 after the personal and age-65 exemptions.

Massachusetts starts with the $60,000 of pension and 401(k) income, since Social Security never enters gross income. Subtract the $4,400 single personal exemption and the $700 age-65 exemption, leaving about $54,900 of taxable income. Tax at 5% is roughly $2,745, and there is no age-based reduction or retirement credit to apply. Contrast: a $150,000 traditional IRA withdrawal adds roughly $7,500 of tax at 5% unless the account still holds Massachusetts previously taxed contributions, and it comes nowhere near the $1,107,750 surtax threshold. A married couple with two exempt Massachusetts Teachers' or state pensions could owe nothing on those pensions while a neighbor with the same dollars from a corporate plan pays the full 5%.

The same $90,000 profile looks different a state line away. The rows below come from the reviewed 51-state table; each state name links to its own guide.

• New Hampshire: has no individual income tax at all.
• Connecticut: treats Social Security as partially taxed, pensions as partially taxed, and 401(k) and IRA withdrawals as partially taxed, with a top rate of 6.99% and income-based Social Security and pension phaseouts.
• Florida: has no individual income tax at all.

The surtax gets the headlines, but the retiree issue is basis. Massachusetts taxed IRA contributions on the way in and 401(k) deferrals were excluded, so the two accounts are taxed differently on the way out. Treating an IRA withdrawal as fully taxable overpays.

Military retirement: Military retirement pay is treated as an exempt U.S. government pension even though service members do not make contributions, so it is not taxed by Massachusetts. See the military retirement tax map for every state's treatment.

Estate and inheritance tax: Massachusetts imposes an estate tax on gross estates above $2,000,000 for deaths on or after January 1, 2023, with a $99,600 credit that removes the old cliff. The Department of Revenue revised the computation steps for decedents dying on or after August 1, 2025.

Selling a home or investments in Massachusetts: retirement-income rules do not cover capital gains. See Massachusetts capital gains tax before selling appreciated property or a brokerage position in the year you move or retire.

• Confirm the exclusion you are claiming. There is no retirement-income exclusion. A taxpayer age 65 or older by December 31 gets an extra $700 personal exemption ($1,400 on a joint return if both spouses qualify), worth $35 per person at the 5% rate. The refundable Senior Circuit Breaker credit for property taxes paid (maximum $2,820 for tax year 2025, indexed) is the larger senior benefit.
• Part-year residents. If you moved into or out of Massachusetts during the year, retirement income is generally allocated to the period of residency, and the former state may still tax distributions received before the move. Document the move date, the new domicile, and where each distribution was received.
• Withholding and estimates. Pension and IRA custodians often withhold federal tax but not Massachusetts tax. If Massachusetts taxes any part of your retirement income, check whether quarterly estimated payments are needed to avoid an underpayment penalty.
• Federal side. The federal return has its own rules: up to 85% of Social Security can be taxable, the temporary $6,000 federal senior deduction is available for 2025 through 2028 subject to income limits, and Roth conversions are taxed in the conversion year. State exemptions do not change any of that.
• Large one-time distributions. Reconstruct the Massachusetts previously taxed contributions in every traditional IRA before taking distributions, using old Form 1 Schedule X records. The state recovery is first-dollar, so early withdrawals from a contributory IRA can be almost entirely tax-free at the state level.

Comparing states before a move? Use the retirement taxes by state table and the moving states tax guide, and read retirement tax planning for how distributions, conversions, and a move are sequenced together.