Updated September 4, 2026. Quick answer: It depends on whether the fund is contributory. Massachusetts fully exempts public and federal pensions paid from a contributory retirement fund, one the employee paid into, but taxes private pensions, military retirement pay, and IRA/401(k) distributions (with an offset for contributions already taxed once by the state).
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Massachusetts taxes retirement income generally.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Fully exempt, no age or income threshold, provided the fund is “contributory” (one the employee contributed to). |
|---|---|
| Private (employer) pensions | Taxable, with a deduction only for the portion of distributions attributable to contributions already taxed by Massachusetts in a prior year; no dedicated private-pension exemption exists. |
| Federal government pensions (FERS/CSRS) | Exempt on the same contributory-fund test as public pensions, applied without discrimination by source; Massachusetts issued this rule (TIR 89-6) specifically in response to Davis v. Michigan (1989). |
| Military retirement pay | Taxable. Military retirement pay is treated as a non-contributory plan, following Barker v. Kansas (1992). |
| IRA and 401(k)/403(b) distributions | Taxable, with a deduction for the portion of distributions attributable to contributions already subject to Massachusetts income tax in a prior year, since Massachusetts does not conform to federal pre-tax treatment the same way. |
| General retirement-income exclusion | A flat $700 additional personal exemption at age 65+, with no income cap, plus a separate Senior Circuit Breaker credit (statutory base $1,500, income- and home-value-capped, adjusted annually for inflation). |
Coordinate this with your overall retirement plan
An adviser can help weigh how much of a pension or IRA withdrawal to take this year, whether a Roth conversion makes sense before or after a move, and how state tax interacts with the rest of your plan, but that does not replace the numbers in your own return.
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Social Security
Social Security is never taxed by Massachusetts. Social Security has its own rules in every state; see the full breakdown in how Massachusetts taxes retirement income generally.
Statute and sources
Governing citation: M.G.L. c.62 sec. 2(a)(2)(E) (pension exclusion), sec. 3(B)(a)(4) (contributory-fund deduction), sec. 3(B)(b)(1)(C) ($700 exemption).
Read September 4, 2026.
Related: how Massachusetts taxes retirement income generally · does Massachusetts tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.