Massachusetts puts short-term capital gains in their own class at 8.5% for tax years 2024 through 2026, while most income classes sit at 5.00% (DOR Tax Rates).

Separately, a 4% surtax applies only to taxable income above an inflation-indexed threshold: $1,107,750 for 2026 and $1,083,150 for 2025 (DOR surtax guidance).

Compare these mechanisms with crypto taxes by state.

What is different in Massachusetts

For 2026, the surtax threshold is $1,107,750 of taxable income. Only the amount above it pays the extra 4%, under DOR's surtax guidance.

The separate 8.5% short-term rate also matters below the threshold. It applies for tax years beginning on or after January 1, 2023, according to the 2024 Form 1-NR/PY instructions. The surtax took effect in 2023; DOR cites M.G.L. c.

62, §§ 4(d) and 5A for it, but the fetched pages cite no statute section for the short-term rate.

Neither mechanism names crypto. Treating a token disposal as a capital gain under these general rules is an inference, not an express state ruling on digital assets.

The surtax guidance covers all chapter 62 taxpayers, including individuals, trusts, estates and unincorporated associations.

Qualifying federal and Massachusetts obligation interest exempt from state tax stays outside the base; otherwise taxable personal-residence gains have no special exclusion.

Use taxable income, not sale proceeds.

Rates, thresholds and deductions

The 4% surtax adds to the class rate on income above the threshold; it does not replace that rate.

Most income is 5.00%; short-term gains are 8.5%. Long-term collectibles gains carry 12% with a 50% deduction. The collectibles rule does not classify an NFT.

DOR's rate page, updated December 30, 2025, lists these rates for 2024-2026. The indexed threshold is $1,107,750 for 2026 (current figure at the Massachusetts Department of Revenue), compared with $1,083,150 for 2025.

Massachusetts rates and surtax thresholds by tax year

Figure Tax year Authority document Scope
Most income classes, 5.00% 2024-2026 DOR, Tax Rates Does not cover short-term gains or collectibles
Short-term capital gains, 8.5% 2024-2026 DOR, Tax Rates Separate class; no statute section for this rate appears in the pages we read
Long-term collectibles gains, 12% with a 50% deduction 2024-2026 DOR, Tax Rates Does not establish that any digital asset is a collectible
Surtax 4% above $1,000,000 2023 DOR, 4% Surtax First effective year; threshold indexed afterward
Surtax 4% above $1,053,750 2024 DOR, 4% Surtax Applies to taxable income above the threshold only
Surtax 4% above $1,083,150 2025 DOR, 4% Surtax Applies to taxable income above the threshold only
Surtax 4% above $1,107,750 2026 DOR, 4% Surtax Applies to taxable income above the threshold only

How a crypto sale reaches the Massachusetts return

Full-year residents file Form 1; part-year residents and nonresidents use Form 1-NR/PY. Schedule B carries interest, dividends and short-term gains, while Schedule D carries long-term gains (DOR resident guide). Schedule 4% Surtax computes the additional tax.

The resident guide starts its Massachusetts gross-income calculation with federal gross income, identifying Form 1 line 10 or Form 1-NR/PY line 12, then applies state adjustments.

Those references do not make adjusted Massachusetts gross income a direct copy of a federal line. General IRC conformity is to January 1, 2024; every federal gain rule does not automatically carry over.

If you need the federal side first, see the federal short- and long-term rates and split short- and long-term sales on Form 8949.

The 2025 resident guide's introduction gives the filing threshold as Massachusetts gross income of $8,000 or more. From 2024, federal joint filers must generally file jointly in Massachusetts, subject to exceptions, with no surtax-payer exception.

Surtax taxpayers must file and pay electronically.

Under the resident guide, the deadline is April 15 after the tax year, or the next business day after a weekend or legal holiday. Pay at least 80% of total tax, including surtax, by that date for an automatic six-month filing extension. Payment time is not extended; extension payments of $5,000 or more must be electronic.

Records to sort before the Massachusetts return

  1. Pick the tax year and pull that year's threshold, not last year's.
  2. Reconcile disposal dates, basis and holding periods against your federal records first.
  3. Separate short-term from long-term results so they can go to Schedules B and D with any Massachusetts adjustments.
  4. Identify your final taxable Parts, after the schedules, for Schedule 4% Surtax.
  5. Keep residency dates, the return type they point to, and proof of electronic filing and payment.

This checklist prepares records; it does not settle a filing position.

Surtax worked arithmetic

The surtax base adds taxable Parts A, B and C, with each negative final Part treated as zero. Part A includes short-term gains, long-term collectibles gains, and interest/dividends other than Massachusetts bank interest. Part B is other taxable income; Part C is long-term capital gains.

Separately, the 2024 instructions for Schedule B, lines 20-22, apply short-term losses to up to $2,000 of interest/dividends, then long-term gains.

A raw trading loss is not a final negative Part.

Worked example, hypothetical figures. Start from Parts that are already calculated, after the schedules are done: Part A $200,000, Part B $1,000,000, Part C negative $40,000.

  • Floor the negative Part at zero, so the surtax base is $1,200,000, not $1,160,000.
  • Tax year 2025: the base less the $1,083,150 threshold leaves $116,850, and 4% of that is $4,674.
  • Tax year 2026: the base less the $1,107,750 threshold leaves $92,250, and 4% of that is $3,690.

Both results are additional surtax only, excluding ordinary Massachusetts and federal tax. A complete return could have adjustments that change the base.

If you moved during the year

Nonresidents use Form 1-NR/PY for Massachusetts-source income. Those over the surtax threshold must file it even when participating in a composite return, under DOR's surtax guidance.

The resident guide assigns the lesser-of-$8,000-or-prorated-personal-exemption filing threshold to nonresidents.

Part-year residents also use Form 1-NR/PY; the 2024 instructions require income adjustments and prorate certain deductions and exemptions by resident days.

They do not prorate every gain by days.

These sources do not settle a nonresident's crypto-gain sourcing. For a move or competing state claims, use the residency method in crypto taxes by state and seek a licensed preparer's help.

What Massachusetts says about crypto by name

The 2024 Form 1-NR/PY instructions ask whether the filer received, sold, exchanged, gifted or otherwise disposed of a digital asset during 2024.

Their definition includes NFTs and virtual currencies such as cryptocurrencies and stablecoins.

This reporting checkbox assigns neither a rate nor a collectibles classification. The rate and surtax pages do not expressly name digital assets; substantive capital-gain treatment remains an inference from general capital-asset rules. The checkbox cannot turn that inference into an express crypto ruling.

Form 1099-DA and the state

The researched Publication 1220 Table 1, revision May 2026, lists Massachusetts as code 25; that evidence came from snippets, not complete PDF inspection. The IRS About Form 1099-DA entry dated January 7, 2026 excludes the form from CF/SF for tax year 2025. Routing for 2026 and later remains open here.

Program participation establishes neither tax treatment, a Massachusetts filing exemption, nor a state-specific broker duty.

Check the tax year and reporting scope

Four items stay open on this page. The DOR rate and surtax pages do not address digital assets expressly, so crypto treatment remains read across from general rules. Sourcing of a nonresident's crypto gain is not addressed in the material we collected.

We have not pulled the statute text behind the 8.5% short-term rate independently; DOR's own citation covers the surtax, not that rate. And for tax year 2026, Form 1099-DA routing through the federal/state program, along with any Massachusetts-specific filing or withholding duty, is unresolved. No such state duty appeared in our evidence, which is not the same as an exemption.

Bottom line

Massachusetts documents its two mechanisms clearly enough to work with: a separate 8.5% class for short-term gains across 2024 through 2026, and a 4% surtax on taxable income above a threshold that moves every year.

The cited pages do not give express crypto treatment. Group records by tax year, holding period, income class and relevant state schedule before applying the general capital-asset rules.

Questions

Does staying below the surtax threshold mean my short-term gains avoid Massachusetts tax? No. The threshold governs the extra 4% layer, while DOR's separate short-term rate also applies below it. Applying the capital-gain class to crypto remains an inference.

Does the digital-assets checkbox prove my crypto gain belongs in the 8.5% class? No. The 2024 digital-assets question reports activity; it assigns no rate or class and does not classify every receipt or NFT.

Do I have to file electronically if I owe the surtax? Yes. DOR's surtax guidance requires both electronic filing and payment. The separate $5,000 extension-payment rule also applies.

Can we avoid the surtax by filing separately in Massachusetts after filing jointly federally? No surtax-payer exception exists.

From 2024, federal joint filers must generally file jointly in Massachusetts unless an exception applies (DOR joint-filing rule).

Two other states tax above a line rather than across the board: Washington's capital gains excise and Minnesota's 1% investment income tax. Their rates and bases do not transfer to Massachusetts.

For the federal layer underneath, use the federal short- and long-term rates; if you want a quick number, estimate the federal tax on a sale covers federal tax only and excludes Massachusetts tax entirely.

Sort your sales by tax year and holding period, then use the split short- and long-term sales on Form 8949 walkthrough to organize the federal records behind your state return.

Sources

  • Massachusetts Department of Revenue, 4% Surtax on Taxable Income Over $1,000,000: thresholds for 2023-2026, Parts A/B/C and the zero floor, taxpayers covered, filing and source-income sections, and the citation to M.G.L. c. 62, §§ 4(d) and 5A. Retrieved 2026-09-29; page reports an update of June 1, 2026.
  • Massachusetts Department of Revenue, Tax Rates: income-class rates for tax years 2024-2026. Retrieved 2026-09-29; page updated December 30, 2025.
  • Massachusetts Department of Revenue, Personal Income Tax for Residents, 2025 guide: return and schedule structure, conformity, filing threshold, deadline, extension and electronic-payment rules. Retrieved 2026-09-29.
  • Massachusetts Department of Revenue, 2024 Form 1-NR/PY Instructions: Digital Assets question, short-term rate effective date, part-year adjustments and Schedule B loss netting. Retrieved 2026-09-29; tax year 2024 form.
  • IRS, About Form 1099-DA: Recent Developments entry of January 7, 2026 on exclusion from the Combined Federal/State Filing program for tax year 2025. Retrieved 2026-09-29.