Updated October 29, 2026. Quick answer: Yes, for a contributory plan. M.G.L. c. 62 section 2 deducts income from any “contributory annuity, pension, endowment or retirement fund of the United States government” to which the employee has contributed, with no dollar cap printed.
What Massachusetts does with a FERS or CSRS annuity
| Question | What the Massachusetts documents say |
|---|---|
| What the source says | Massachusetts statute lets a taxpayer deduct income from any contributory annuity, pension, endowment or retirement fund of the United States government to which the employee has contributed, so a contributory federal civil service pension is deducted from Massachusetts gross income. |
| Amount or limit | Full deduction of the income from the contributory federal fund, with no dollar cap printed in the statute; the qualifier is that the employee has contributed to the system (the same clause separately covers uniformed services retirement pay regardless of contributions). |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Massachusetts documents’ own words
- “to which the employee has contributed” (M.G.L. c. 62, section 2 (Massachusetts gross income))
- “Massachusetts gross income shall mean the federal gross income, modified” (M.G.L. c. 62, section 2 (Massachusetts gross income))
- “until an aggregate amount of such income has been deducted” (M.G.L. c. 62, section 2 (Massachusetts gross income))
How this differs from other pensions in Massachusetts
Federal contributory pensions are deducted outright, while the separate clause for private plans and IRAs allows a deduction only until the amount deducted equals the amounts previously taxed by Massachusetts. Massachusetts gross income starts from federal gross income, so the deduction applies to what appears on the federal return. See also Does Massachusetts tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The statute deducts income from plans described in sections 403(b) or 404 of the Code and from IRAs only until the aggregate deducted equals amounts previously taxed by Massachusetts; it does not name the TSP. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
Where this rule sits on the Massachusetts return
The deduction comes from M.G.L. c. 62 section 2, which defines Massachusetts gross income as federal gross income, modified. The federal pension clause is one of those modifications.
Checks before you rely on this answer
- Confirm with your retirement system that your contributions were made as an employee, since the clause covers a fund to which the employee has contributed.
- Do not assume the deduction extends to a TSP or IRA withdrawal, because the statute handles those in a separate clause.
- Read the 2025 Form 1 instructions before filing, because this page rests on the statute alone.
What the Massachusetts documents leave open
The statute does not name CSRS, FERS or the TSP, and whether a federal system counts as contributory is not stated in the documents cited here. No Department of Revenue guidance or 2025 return instructions were read, so the rate applied for 2025 is not stated on this page.
Common mistakes
- Assuming every federal pension qualifies. The clause covers a contributory fund, so a plan the employee did not contribute to needs separate checking.
- Treating a private plan the same way. The separate clause for private plans and IRAs deducts only until the aggregate deducted equals amounts previously taxed by Massachusetts.
Related: Does Massachusetts tax pensions?, Massachusetts military retirement pay, and FERS, TSP and Social Security sequencing.
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Answer againSources
- M.G.L. c. 62, section 2 (Massachusetts gross income): https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section2
- M.G.L. c. 62, section 4 (Rates of tax): https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section4
Read from the state documents linked above on October 29, 2026. General information, not tax advice.