Massachusetts Estate Tax 2026: $2M Threshold, $99,600 Credit

What the law says after the 2023 reform

Most pages on this tax call $2,000,000 an exemption. The statute does not: it has a no-tax rule, a credit, and a separate filing rule at the same dollar figure.

The 2023 change came in St. 2023, c. 50, signed on October 4, 2023, according to the Department's Administrative Procedure 500, which describes the credit as “eliminating the tax for estates valued at $2 million or less and reducing the tax for estates valued at more than $2 million.” A 2024 act (St. 2024, c. 206) changed the treatment of out-of-state property, and a 2025 act (St. 2025, c. 9, section 35) took effect on August 1, 2025; both are covered below. The copy of the Department's guide we could load shows "Updated: October 25, 2024"; our federal exemption page cites a later update of April 23, 2026 that we could not load, so check the Department's page for newer wording.

A credit, not a cliff: 7.2 cents on the first dollar over $2 million

Searchers expect a threshold with a jump, as in New York. Massachusetts has none. Table B on a $2,000,000 taxable estate gives $99,600, the credit takes all of it, and each dollar above $2,000,000 is taxed at the Table B marginal rate. The first band is the one nobody prints: from $2,000,000 to $2,100,000 the rate is 7.2%, because the adjusted estate of $1,940,000 sits inside the $1,540,000 to $2,040,000 band. Our arithmetic gives $72 at $2,001,000 and $7,200 at $2,100,000.

The marginal rate rises 0.8 points at each step until the 16.0% band that starts at an adjusted estate of $10,040,000, which is a taxable estate of $10,100,000. The first $1,000,000 above the line costs $82,400 at a $3,000,000 estate (our arithmetic).

Tax by estate size, $2 million to $15 million

Every figure below is our arithmetic from the Department's Table B and the section 2A(f) credit. It assumes the number is the federal taxable estate (gross estate less debts, expenses and the marital and charitable deductions), a single resident, all property in Massachusetts, no taxable gifts and a 2026 death. It reproduces the Department's own example, $39,200 on $2,500,000.

The Department's guide prints Table B in full; here it is as the guide gives it, in adjusted-taxable-estate terms (taxable estate less $60,000):

Before and after the reform

For deaths before 2023 the tax was Table B alone, with a $1,000,000 filing line. The same estate now pays $99,600 less at every size above $2,000,000, which is a large share of the bill near the line and a small one at the top.

The reform did not lower the rates; it lowered the bill by a fixed amount. A $10 million estate saves under 10% of its old Table B figure; a $2.5 million estate saves 72% (our arithmetic: $138,800 before, $39,200 now).

Two tests, not one: when you file and when you pay

The Department's guide says a return is required when “the gross estate, plus adjusted taxable gifts” exceeds the threshold, while section 2A(g) relieves the tax when the federal taxable estate is not more than $2,000,000. A few cases show the gap (our arithmetic):

Gifts matter only for the filing line. The Form M-706 instructions state that “Adjusted taxable gifts affect the Massachusetts filing threshold but are not added to the taxable estate” for the credit computation, which differs from states that add gifts back into the tax base, as our states list shows. The return also requires a copy of the federal Form 706 on the July 1999 revision, because the Massachusetts tax is computed on 2000 law.

Out-of-state property and nonresidents: the August 1, 2025 rules

Since August 1, 2025, section 2A removes real and tangible personal property located outside Massachusetts from a resident's computation, and for a nonresident it computes the credit on Massachusetts real and tangible property alone. The Form M-706 instructions (a draft dated October 17, 2025 is the copy we saved) say residents get no deduction for expenses attributable to the excluded property.

Fund and LLC interests are intangible property, so they count in a resident's computation and fall outside a nonresident's (our reading of the statute's real-and-tangible wording). The instructions tell a nonresident's estate to file Form M-NRA with the return and say the estate may have a filing requirement even when the Massachusetts property is worth less than the exempt amount. The assumption in the table, that no deductions are attributable to the property, is ours; for a nonresident the statute allows deductions attributable to Massachusetts property. Our states list compares this with 16 other jurisdictions.

Couples: no portability, and a Massachusetts-only QTIP

We found no provision in G.L. c. 65C, section 2A that lets a survivor use a deceased spouse’s unused $2,000,000. The only spousal election in the text is the Massachusetts QTIP: the estate of the first spouse can elect a marital deduction for Massachusetts without making the federal election, and section 2A(a)(iii) adds that property back to the survivor's computation. In our arithmetic:

The difference is $230,400. Because the Massachusetts line is $2,000,000 and the federal exclusion is $15,000,000, a bypass sized to the federal figure would be far larger than Massachusetts needs; the Massachusetts-aware amount is the first $2,000,000. Our page on credit-shelter trusts, QTIP and disclaimers covers the basis trade-off, and the step-up page covers the income-tax side.

If you own rentals, LLC interests or fund shares

For a Massachusetts resident the whole estate is in, wherever the intangibles sit, and property is valued at the date of death or the alternate valuation date six months later. Three practical points follow from the Department's own text.

• Cash is due nine months after death. On a $3,200,000 taxable estate the tax is $100,800 (our arithmetic). An extension of time to file is automatic only if at least 80% of the tax finally due is paid by the due date, and interest runs from the original date either way. A building that takes longer to sell, or a fund that repurchases only in set windows, can make that date hard; see what happens to non-traded REIT and BDC shares at death.
• The estate tax lien attaches to Massachusetts real estate. It is valid for 10 years from death unless the tax is paid, and a Certificate Releasing Massachusetts Estate Lien is needed to sell or refinance a building when a return is required. A sale that closes before the return is filed can use Form M-4422. See our probate guide for the court process that runs in parallel.
• A rental in another state may cost less here than at home. If it is deeded in the owner's name, it drops out of the Massachusetts base (table above); if it sits in an LLC, the LLC interest is intangible and stays in. The other state may tax it under its own rules.

What a reader can do with this

What you can check before talking to anyone:

• Find the taxable estate. Add the home, rentals, fund and LLC interests, retirement accounts, life insurance you own and cash; subtract debts, expenses and what passes to a spouse or charity; read the grid above.
• Test both $2,000,000 lines. Gross estate plus gifts decides whether a return is filed; the taxable estate decides whether tax is due.
• List what is outside Massachusetts and how it is titled: a deed carves it out; an LLC interest does not.
• Check a couple's documents. If everything passes to the survivor, the first $2,000,000 can be wasted. Check whether an earlier spouse's estate made a Massachusetts-only QTIP election.
• Plan the cash. The bill is due in nine months; the lien on real estate has to be released before a clean sale.

The decision, and who makes it. The estate plan is drafted by an estate-planning attorney, the Massachusetts and federal returns are prepared by that attorney or a CPA, and appraisals come from credentialed appraisers. A financial adviser's part is how the tax would be paid and what to sell. Nothing here is a recommendation to change a plan.

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on October 21, 2026: G.L. c. 65C, section 2A (mass.gov copy of the statute, last updated June 30, 2025, incorporating St. 2023, c. 50, St. 2024, c. 206 and St. 2025, c. 9, section 35); Massachusetts Department of Revenue, Massachusetts Estate Tax Guide (Internet Archive capture of mass.gov/guides/a-guide-to-estate-taxes, text updated October 25, 2024, with Table B and the Department's examples); Department of Revenue, Instructions for Massachusetts Estate Tax Return Form M-706 for dates of death on or after August 1, 2025 (draft as of October 17, 2025); Department of Revenue, Administrative Procedure 500, Estate and Inheritance Tax; Rev. Proc. 2025-32 (irs.gov). We could not load the Department's Estate Tax Changes FAQs or a 2026 version of the guide. The tax grids, marginal bands, before-and-after comparison and couple and property cases are our arithmetic, with the assumptions stated. This is analysis of public documents, not investment, legal or tax advice.