Massachusetts Millionaires Tax 4% Surtax 2026 Calculator
The Massachusetts millionaires tax (Fair Share Amendment) adds a 4% surtax to MA taxable income above $1,083,150 in 2026 (inflation-adjusted) on top of the 5% flat base rate. Top combined MA rate = 9% on income above the threshold.
| MA taxable income | — |
| 2026 surtax threshold | $1,083,150 |
| Income over threshold | — |
| Base 5% MA tax | — |
| 4% surtax on excess | — |
| Federal SALT cap interaction | — |
| Total MA tax owed | — |
The Massachusetts millionaires tax (Fair Share Amendment, Article CIV of the MA Constitution) adds a 4% surtax to taxable income above $1,083,150 in 2026 — on top of the 5% flat base rate. Top combined MA rate = 9% on income above the threshold. The threshold is indexed annually for inflation.
How the 4% Surtax Works
Approved by voters in November 2022 (Question 1, Fair Share Amendment), the surtax took effect January 1, 2023 with a starting threshold of $1,000,000. The MA Department of Revenue indexes the threshold annually — 2024: $1,053,750; 2025: $1,083,150; 2026: $1,083,150 estimated. The 4% surtax applies to all forms of taxable income over the threshold: wages, business income, capital gains, dividends, retirement distributions. Only individual returns are affected (joint and single use the same threshold, no marriage penalty mitigation).
Federal SALT Cap Interaction
The $10,000 SALT (State and Local Tax) deduction cap from TCJA means most of your MA tax above $10K is NOT federally deductible. For a millionaire paying $135K in MA tax, only $10K is deductible — the remaining $125K is paid with after-federal-tax dollars. This pushes the effective cost of the 4% surtax higher. Massachusetts created a PTE (Pass-Through Entity) election as a workaround for pass-through business owners — see Form 63D-ELT.
Income Smoothing and Avoidance Strategies
For one-time events (business sale, IPO, large bonus): (1) Installment sale under IRC §453 — spread payment over multiple years to stay under the threshold each year. (2) QSBS §1202 — federal exclusion of up to $10M on qualified small business stock (no MA-specific add-back). (3) Charitable Remainder Trust — defer recognition and spread tax over decades. (4) Domicile change — establish residency in NH, FL, or TX before the realization event. MA aggressively audits domicile changes for high-net-worth individuals.
Litigation and Future Changes
The surtax has survived legal challenges so far. Revenue collected — over $2.4 billion in FY24, ahead of projections — is constitutionally earmarked for public education and transportation. Several proposals to raise the threshold or carve out one-time events have failed in the MA Legislature. Plan for the surtax to remain at 4% for the foreseeable future. The MA Constitution requires a constitutional amendment to repeal or modify the rate.
Last updated May 2026. Sources: MA DOR, MA Constitution Article CIV, Mass. General Laws Chapter 62 §4.