Updated October 7, 2026. Quick answer: Only if you live there, or the income is Massachusetts sourced. The Massachusetts statute taxes a nonresident only on income from sources within the commonwealth, and for residents it defines “Massachusetts gross income shall mean the federal gross income” with listed modifications, including deductions for certain public pensions.
How Massachusetts treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | The Massachusetts statute taxes a nonresident only on gross income from sources within the commonwealth, which means business or employment carried on there, wagering there, and real or tangible personal property there. It lists nonqualified pension income as Massachusetts source income only to the extent federal law does not prevent state taxation, and it carves out income from qualified tax-deferred retirement plans that is exempt under another provision of the chapter. The source says: “not prevented from state taxation by the laws of the United States”. This row rests on General Laws chapter 62 section 5A, not on the Form 1-NR/PY instructions. |
| Residents with a pension earned elsewhere | A resident starts from federal gross income with Massachusetts modifications. The statute deducts income from a contributory pension or retirement fund of the United States government, the commonwealth or its political subdivisions, and retired pay of the uniformed services. It also deducts distributions from many retirement plans and IRAs until the aggregate amount previously taxed by Massachusetts has been recovered. This row rests on the statute text, not on the Department’s Form 1 instructions. |
| Part-year residents (year of a move) | Chapter 62 section 5 prorates the no-tax income threshold by days for a year split between residence and nonresidence. It also provides that, for a person who is a nonresident for all or part of the year, Massachusetts adjusted gross income is determined as if the person were a resident throughout the year. The source says: “as if he were a resident of the commonwealth”. The statute does not spell out the full part-year allocation method; the Form 1-NR/PY instructions would. |
| Rate | The Department of Revenue rates page lists personal income at 5.00%, with an additional 4% surtax on income over $1,083,150 for tax year 2025. The source says: “there is an additional surtax of 4%”. The rate is the same for residents, nonresidents and part-year residents. |
| Return to file | The statute and rates page cited below do not name the return forms. The Department of Revenue’s Form 1 and Form 1-NR/PY instructions would name them. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as a Massachusetts resident, and $20,000 after leaving.
The first $20,000 can be taxed by Massachusetts; the rest is outside its reach under the federal rule below. At the 5.00% rate printed for 2025, the tax on it is computed as $20,000 x 0.05 = $1,000, before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means certain plan payments made as a “series of substantially equal periodic payments”, so not every payment is covered.
Related: how Massachusetts taxes retirement income, whether Massachusetts taxes pensions, Massachusetts to Arizona retirement taxes, Massachusetts to Delaware retirement taxes, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- Massachusetts tax rates page (Department of Revenue): https://www.mass.gov/info-details/massachusetts-tax-rates
- General Laws chapter 62 section 2 (Legislature): https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section2
- General Laws chapter 62 section 5A (Legislature): https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section5A
- General Laws chapter 62 section 5 (Legislature): https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section5
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 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.