How to File Your Massachusetts Tax Return for 2023: Step-by-Step Guide for Individuals and Small Businesses

Filing your Massachusetts tax return for 2023 is an important step to stay compliant with state tax laws and avoid unnecessary penalties. Whether you are a full-year resident, part-year resident, or nonresident with Massachusetts income, understanding the process will help you file accurately and on time. This guide walks you through each step, from choosing the proper forms to submitting your completed return.

For most taxpayers, the process begins by gathering their financial information, including W-2s from their employer, 1099s, and details from their federal taxes. You will also need to determine your filing status, decide whether to use paper forms or tax filing software, and check for any changes that may affect your income tax returns this year. Preparing before you file can help prevent errors and reduce delays in receiving your refund.

The Massachusetts Department of Revenue offers several ways to file and pay, including online systems like MassTaxConnect, which make the process easier for individuals and small businesses. This guide will give you clear instructions, tips to help you complete each step, and answers to common questions about payments, refunds, and what to do if you owe taxes. You will have the information you need to confidently submit your return by the end of the month.

Overview of Massachusetts State Income Tax for 2023

Massachusetts requires residents and nonresidents earning enough income to file a Massachusetts tax return yearly. Whether you expect a refund or owe taxes, understanding the state’s rules for the 2023 tax year will help you complete the process correctly, avoid penalties, and ensure your return is processed without unnecessary delays. Your filing requirements are based on your income level, residency status, and other specific circumstances.

Who Must File

You must file a Massachusetts tax return if your income meets or exceeds the state’s filing thresholds. These thresholds are set by the Massachusetts Department of Revenue and apply to most individuals, regardless of age:

Full-year residents must file if their Massachusetts gross income is more than $8,000 for the year. Gross income includes all taxable earnings before deductions, whether from wages, self-employment, investments, or other sources.
Part-year residents must file if their Massachusetts gross income is more than $8,000, even if they only lived in the state for part of the year. The income considered is the amount earned while living in Massachusetts.
Nonresidents must file if their Massachusetts gross income is more than $8,000 or greater than the prorated personal exemption, whichever is less. This ensures that individuals earning significant income from Massachusetts sources are subject to state taxes, even if they live elsewhere.

Residency Definitions

Your residency status determines which forms you must complete and how you report your income on your Massachusetts tax return. The state uses clear guidelines to define each category:

Full-year resident: You are considered a full-year resident if your home is in Massachusetts for the entire tax year. You are also considered a full-year resident if your home is not in Massachusetts, but you maintain a permanent residence in the state and spend more than 183 days in Massachusetts during the year.
Part-year resident: You are considered a part-year resident if you moved to Massachusetts during the tax year and became a resident, or if you moved out of Massachusetts during the tax year and ended your resident status. You will report only the income earned during your period of residency.
Nonresident: You are considered a nonresident if you did not meet the requirements for full-year or part-year residency but earned income from Massachusetts sources. This includes wages from a Massachusetts employer or income from property or business activities in the state.

Filing Deadlines

Massachusetts generally follows the federal tax calendar, but you must meet state deadlines to avoid late-filing penalties and interest:

The standard due date for filing 2023 Massachusetts income tax returns is April 15, 2024. If April 15 falls on a weekend or state holiday, the deadline moves to the next business day.
Extension deadline: October 15, 2024, if you requested and were granted an extension to file. It is important to note that an extension to the file does not extend the time to pay. Any taxes owed must still be paid by the April deadline to avoid additional charges.

Key Changes for 2023

For the 2023 tax year, Massachusetts has introduced a significant change affecting high-income earners. The state now imposes a 4% surtax on taxable income over $1,000,000. This threshold is adjusted annually for inflation. If you are subject to the surtax, you must complete and submit Schedule 4% Surtax in addition to your regular Massachusetts income tax return. This change may impact tax planning strategies for individuals and small business owners with high earnings, making it essential to review your financial details and determine your potential tax liability before filing.

Choosing the Right Massachusetts Tax Forms

Selecting the correct forms for your Massachusetts tax return is essential to avoid delays and ensure your filing is processed correctly. The form you choose depends on your residency status and the type of income you earned during the year.

Main Forms

Form 1 is the Massachusetts Resident Income Tax Return used by full-year residents to report all taxable income, claim deductions, and apply any eligible credits.
Form 1-NR/PY is the Massachusetts Nonresident/Part-Year Resident Tax Return used to report only Massachusetts-source income if you lived in the state for part of the year or were a nonresident.

Common Schedules and Supporting Forms

Depending on your situation, you may need to complete one or more of the following schedules:

Schedule HC is required for most taxpayers to report health care coverage for the tax year.
Schedule B reports interest, dividends, and certain capital gains taxable in Massachusetts.
Schedule C reports profit or loss from a business if you are self-employed or operate as a sole proprietor.
Schedule D reports long-term capital gains and losses from investments or property sales.
Schedule E reports rental income, royalties, or income from partnerships, S corporations, and trusts.
Schedule 4% Surtax is required if your taxable income exceeds $1,000,000 and is subject to the state’s additional surtax.
Qualifying seniors and specific disabled individuals use Schedule CB to claim the Circuit Breaker Credit.

You can access all forms and instructions on the Massachusetts Department of Revenue website. Reviewing the instructions before you file helps you provide accurate details and avoid errors that could delay your refund.

Step-by-Step Instructions for Completing Your Massachusetts Tax Return

Following a clear and organized process helps you complete your tax return accurately, avoid penalties, and reduce the risk of delays.

Step 1 – Gather Required Documents

Get all of your W-2 forms from each of your employers to check your pay and the Massachusetts taxes that have already been taken out.
Collect all 1099 forms that show income from interest, dividends, contract work, unemployment, or other sources that aren't wages.
Find your MA 1099-HC form to show that you met the health insurance requirements in Massachusetts.
Keep a copy of your Massachusetts tax return from last year for this year's filing.
Get together records of deductions and credits, like receipts for donations to charity or school costs.
Keep a copy of your federal tax return, since some numbers go straight to your state return.

Step 2 – Complete the Correct Form

To ensure everything is the same, type your information exactly as it appears on your federal return.
Report your income from the year and make any changes specific to Massachusetts as directed on the form.
Choose the standard and itemized deductions based on which will lower your tax bill the most.
Use the tax tables with instructions for your filing status to determine how much state income tax you owe.
Use any credits you qualify for to lower the amount of tax you owe.

Step 3 – Attach Required Schedules

Include Schedule HC to verify your health care coverage and any other schedules that apply to your income type, deductions, or credits.

Step 4 – Review and Submit

Review your return carefully for missing signatures, incorrect numbers, or incomplete sections that could delay processing.
You can submit your return electronically for faster processing or mail a paper return to the appropriate Massachusetts Department of Revenue address.
Keep a copy of your completed return, schedules, and supporting documents for your records.

Filing Options for Your Massachusetts Tax Return

Massachusetts offers multiple filing methods to choose the best fit for your needs and comfort level.

Electronic Filing

MassTaxConnect is the state's official website where you can file your taxes, pay them, check on the status of your refund, and manage your tax account all in one place.
Free File is available through partnerships with approved vendors. It lets eligible taxpayers file their taxes online for free based on their income level or other criteria.
Tax filing software vendors that have been approved can help you complete your return step-by-step and file it electronically with the state.

Paper Filing

If you want to file by mail, send your return to the address on the form for the current year that matches your filing situation. This is true whether you send a payment or ask for a refund.
Remember that paper returns take much longer to process than electronic ones. As a result, you might have to wait a few more weeks for your refund.
Ensure you include all the necessary forms, schedules, and attachments to avoid having your return sent for corrections.

Taxpayers can file their taxes electronically or on paper, but confirming that their return has been received is faster, easier, and more reliable.

How to Make a Payment

If you owe taxes after completing your Massachusetts tax return, the state offers several convenient payment options. Choosing the right payment method and paying on time will help you avoid penalties and interest charges.

Payment Methods through MassTaxConnect

The fastest and safest way to pay is by Electronic Funds Transfer (EFT), which you can do directly from your bank account.
You can pay with a credit or debit card through an approved third-party processor, but there are fees for using a card.
The "Make a Payment" button on the MassTaxConnect homepage lets you pay without logging in, which is helpful for quick one-time payments.

Payment Deadlines and Penalties

All payments must be received by 11:59 PM on the tax due date to avoid penalties and interest charges.
If the due date falls on a weekend or holiday, payments are considered on time if received on the next business day.
Failing to pay on time may result in penalties, and the Massachusetts Department of Revenue can issue notices for unpaid balances.

How to Track Your Refund or Balance Due

After you file your Massachusetts tax return, you can check your refund status or confirm your account balance anytime. Tracking your return can help you estimate when your refund will be issued or confirm if you still owe taxes.

Checking Refund Status

Use the “Check the Status of Your Refund” tool on the Massachusetts Department of Revenue website to see if your refund has been processed.
You will need your Social Security number, the tax year, and the refund on your return.
Electronic returns are typically processed within two weeks, while paper returns can take six weeks or longer.

Viewing Your Balance Due

Log in to MassTaxConnect to check your account balance, payment history, and any amounts owed.
The system displays amounts due in red and overpayments or credits in green, so you can quickly determine your status.

Final Filing Checklist

Checking off everything on a final checklist before you send in your Massachusetts tax return can help you avoid delays, having your return rejected, or missing out on a refund. Taking the time to check each item will ensure your return is correct and complete.

Check that you used the proper form for your residency status. If you live there all year, use Form 1. If you only live there part of the year or are not a resident, use Form 1-NR/PY.
Ensure all required schedules, such as Schedule HC and any other applicable forms, are filled out and attached to your return.
Include copies of all W-2s, 1099s, and other income statements provided by your employer or financial institution to verify reported earnings.
To prevent processing issues, double-check that all Social Security numbers, names, and addresses match the information on your federal taxes.
Sign and date your return before submission, whether filing electronically or sending a paper return by mail.
If you owe taxes, select your preferred payment method, such as direct deposit or paper check, or choose your refund delivery method, such as direct deposit or paper check, if you are expecting a refund.
Keep copies of your completed return, all attached schedules, and any payment confirmations for your records if you need them in future years.

Frequently Asked Questions

How can I check the status of my Massachusetts tax refund?

You can check your refund status online through the Massachusetts Department of Revenue’s tracking system. You will need your Social Security number, the tax year, and the exact refund amount from your tax return. Electronic filings are processed faster than paper returns, so your refund may be issued sooner. Checking your status regularly helps you track the process and know when to expect your money.

What should I do if I owe taxes but cannot pay in full?

If you cannot pay the full amount owed on your Massachusetts tax return, apply for a payment plan through MassTaxConnect. This system allows you to submit an application, decide on a monthly payment amount, and agree to terms that help you avoid additional penalties. Providing accurate financial information will determine your eligibility and prevent the state from taking further collection steps.

Can I change my filing status after submitting my return?

Yes, you can change your filing status on a Massachusetts tax return if you made an error or your circumstances changed. To do so, file an amended return with the correct details and supporting documentation. Be sure to sign and submit the amendment promptly. Changing your status may affect the taxes you owe or the expected refund.

What happens if my return has errors?

If your Massachusetts tax return contains errors, the Department of Revenue will send you a notice explaining the issue. You should respond by the stated deadline, provide any missing information, and correct the errors to prevent further delays. Using tax filing software or carefully checking your return before you file can help reduce mistakes and improve the accuracy of your income tax returns.

How do I contact the Massachusetts Department of Revenue about my return?

You can contact the Massachusetts Department of Revenue via phone, email, or through your MassTaxConnect account. When reaching out, have your tax return details ready, including your account number, filing status, and the tax year in question. This information will help the DOR answer your questions quickly. Always respond promptly to any notice to protect your rights and prevent penalties.

Is there an easy way to file my Massachusetts tax return?

Yes, using approved tax filing software can make the filing process faster and easier. This option allows you to complete your return, check for errors, and submit it electronically to the state. Many programs also estimate your refund and provide ways to track your refund status. If you prefer, you can still file by mail, but processing times are generally longer.