In addition to the federal estate taxAn estate tax is imposed on the net value of an individual’s taxable estate, after any exclusions or credits, at the time of death. The tax is paid by the estate itself before assets are distributed to heirs., which has a top marginal rate of 40 percent, 12 states and the District of Columbia impose estate taxes, while five states levy inheritance taxes. Maryland is the only state that imposes both an estate and an inheritance taxAn inheritance tax is levied upon the value of inherited assets received by a beneficiary after a decedent’s death. Not to be confused with estate taxes, which are paid by the decedent’s estate based on the size of the total estate before assets are distributed, inheritance taxes are paid by the recipient or heir based on the value of the bequest received.. This proposed law would, over a period of three years, lower the tax rates on (1) personal taxable income consisting of interest and dividends, and (2) personal taxable income other than interest, dividends or capital gain income, such as wages and salaries. The proposed law would set both tax rates at 4.67% for tax year 2027, 4.33% for tax year 2028, and 4.00% beginning in tax year 2029.
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- For example, taxpayers can make deductions for child care expenses, college tuition (if it exceeds 25% of Massachusetts adjusted gross income), certain commuter costs, rental payments (50% of rent up to $4,000) and student loan interest payments.
- A handful of states will be implementing meaningful changes to their sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions.
- With the exception of mortgage, home equity and other home-lending products or services, partner compensation is one of several factors that may affect which products we highlight and where they appear on our site.
- This rate will be reduced to 3.99 percent for tax years beginning on or after January 1, 2027, subject to revenue availability.
You qualify as a farmer or fisherman for any taxable year if your gross income from farming or fishing is at least two-thirds (66.67%) of your annual gross income. The threshold for the mandatory first installment of estimated tax payments for corporate taxpayers increases from $1,000 to $5,000. Kentucky’s individual income tax rate will decrease from 4 to 3.5 percent on New Year’s Day as a result of tax triggers originally adopted in 2022. The triggered rate reduction to 3.5 percent was proactively approved by the legislature and governor with the enactment of H.B. 1 in February 2025, since Kentucky’s triggers require ratification at each stage. Florida’s HB7031 included several tax provisions that go into effect on January 1, 2026.
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📲 Many state revenue departments now prioritize e-filed returns, and paper returns may face longer delays. The rate for the underpayment penalty is the current federal short-term interest rate plus 4% points compounded daily. SB 5814 amended the definition of “tobacco products” Purchases Journal to include nicotine products like oral nicotine pouches beginning January 1, 2026, which will subject them to the state’s 95 percent tax on tobacco products. AB330 delays the sunset of the state’s Local Prepaid Mobile Telephony Services (MTS) Collection Act that was set to expire on January 1, 2026, to January 1, 2031.
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The revenue collected goes towards funding state-level services and programs, such as education, infrastructure, and public safety. As part of the FY 2026 budget (A4455), New Jersey adopted a Qualified Small Business Stock (QSBS) exclusion, similar to federal rules (IRC § 1202), which provides a capital gains exemption on the sale of eligible small business stock, effective January 1, 2026. HB594 also grants a state and local sales and use tax exemption for all machinery and equipment used to provide broadband communication services. The sales tax on cigarettes will increase from 78.6 cents per pack to 84.0 cents per pack of 20 cigarettes on January 1, 2026. The additional $3.04 per pack excise tax will not change, bringing the total tax per pack https://akrasov.ru/the-ultimate-guide-to-the-three-financial-2/ from $3.826 to $3.880.
Beginning in tax year massachusetts income tax rate 2023, the law reduced Pennsylvania’s corporate net income tax rate from 9.99 percent to 8.99 percent, with additional 0.5 percentage point reductions scheduled for each year until 2031, when the rate is scheduled to reach 4.99 percent. Consequently, for 2026, corporations will face a flat 7.49 percent income tax in Pennsylvania, down from 7.99 percent in 2025. In 2021, North Carolina enacted legislation that would eliminate the corporate income tax by 2030, with gradual phasedowns occurring over several years.
Illinois will eliminate its transaction economic nexus threshold for remote sellers, retaining just its sales threshold. Arkansas will continue to phase out its throwback rule, adopt market-based sourcing, and adopt an economic nexus threshold for non-resident corporations. Share this article with your friends and family to keep them informed about the future of taxes in Massachusetts! The debate isn’t solely about economics; it’s also deeply intertwined with political agendas. The Massachusetts Opportunity Alliance, a key proponent of the ballot measure, is backed by substantial contributions—$1.6 million in in-kind contributions—tied to signature drive services. The Alliance is closely linked to prominent figures like Adam portnoy, chair of the Pioneer Institute board.