Skip to content
Independent money guidance
Clear Money Guide
Start here
Menu

Does Massachusetts Tax Capital Gains? Yes, 5% Long, 8.5% Short

Updated October 4, 2026. Quick answer: Yes. The Department of Revenue’s rate table prints 5.00% for “Long term capital gains from dividends, interest, wages, and other income” and 8.5% for short-term capital gains, with a 4% surtax on income over $1,107,750 for 2026.

Selling your home? How the state taxes the profit, from its own tax documents: Does Massachusetts tax the profit from selling your home?.

The same question for dividends and interest: does Massachusetts tax dividends and interest.

How Massachusetts treats capital gains

ItemWhat the documents say
Long-term gains5.00%
Short-term gains8.5%
Long-term gains on collectibles12.00%, “subject to a 50% deduction”
SurtaxAn additional 4% on income over $1,083,150 for tax year 2025 and over $1,107,750 for tax year 2026

A $50,000 long-term gain

A $50,000 long-term gain is taxed at 5.00%, computed as $50,000 x 5.00% = $2,500. The same amount as a short-term gain is taxed at 8.5%, computed as $50,000 x 8.5% = $4,250.

The 4% surtax applies only to income above the threshold, so it does not touch a $50,000 gain unless your total income is already over it.

What changes in 2026

The 2026 surtax threshold is $1,107,750, up from $1,083,150 for 2025; the rates in the table are the same for both years.

Federal rules

The state’s treatment sits on top of the federal one. The IRS explains the federal tax on gains in Topic no. 409, Capital Gains and Losses and Publication 550, Investment Income and Expenses.

Related: whether Massachusetts taxes pensions, how Massachusetts taxes retirement income, the capital gains tax by state table, and the federal capital gains tax calculator.

Find the right next step for your situation

About how much do you have invested? Pick the range that fits; your next step appears immediately below.

About how much do you have invested?

Sources

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.

See the adviser match on this page