The Massachusetts Millionaire's Tax
This increase in Massachusetts state personal income taxes was passed in late 2022 and is effective as of 1/1/2023. It is assessed on the personal tax return and applies to all income above the threshold. If taxable income exceeds $1,000,000 there is an additional 4% tax on the amounts above the threshold.
There was a lot of discussion about the applicability to the sale of personal residences. For personal residences, there is an exclusion that reduces the gain taxability. For those that are married filing jointly there is an exclusion up to $500,000 and $250,000 if you’re single. Only amounts greater than the threshold would be included in this tax calculation.