Updated October 4, 2026. Quick answer: Yes. Massachusetts taxes traditional 401(k) and IRA withdrawals at its flat 5.00% rate, and the Form 1 booklet says “Income from most private pensions or annuity plans is taxable in Massachusetts”.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Massachusetts tax on inherited IRA withdrawals.
Contributing to an HSA? How the state taxes it, from its own tax documents: Does Massachusetts tax HSA contributions?.
What Massachusetts does with 401(k) and IRA withdrawals
The booklet says IRA and Keogh distributions are reported on Schedule X; the rates page lists the flat rate and the surtax threshold.
| Item | What the documents say |
|---|---|
| Treatment | Taxable, as most private plan income is |
| State rate | 5.00% flat, plus a 4% surtax above $1,083,150 (2025) or $1,107,750 (2026) |
| Source | Massachusetts Department of Revenue, 2025 Form 1 instructions and tax rates page |
A $40,000 withdrawal
A $40,000 withdrawal adds $2,000 of Massachusetts tax at 5.00% (computed as $40,000 times 5.00%), before any exemption or deduction. The 4% surtax applies only to income above $1,083,150 on the 2025 return.
What changes in 2026
For 2026 the surtax threshold rises to $1,107,750 and the 5.00% rate is unchanged, per the Department’s tax rates page.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Massachusetts taxes pensions, how Massachusetts taxes retirement income, whether Massachusetts taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
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Answer againSources
- 2025 Massachusetts Form 1 instruction booklet: https://www.mass.gov/doc/2025-form-1-instructions/download
- Tax Rates | Mass.gov: https://www.mass.gov/info-details/massachusetts-tax-rates
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.