What it is, and what it is not
The Massachusetts estate tax is a tax on the estate of the person who died. It is paid by the estate before assets go to the heirs, so it reduces what the heirs receive; it is not billed to each heir. Massachusetts also taxes the gain when someone sells an inherited house, which is a separate tax covered on the taxes section of our main guide.
What counts toward the $2,000,000. DOR defines the federal gross estate as property the person beneficially owned at death, whether vested or contingent, real or personal, tangible or intangible, jointly held or in the decedent’s name alone. So the house counts, along with bank, retirement and brokerage accounts, life insurance owned by the person, vehicles and the rest. The test is the whole estate, not the house alone.
The filing line is $2,000,000 for deaths on or after January 1, 2023. For deaths from 2006 through 2022 it was $1,000,000. If the death was earlier, check the DOR guide for that year with your attorney.
How the tax is figured: the credit, not a cliff
A common fear is that an estate $1 over $2,000,000 owes tax on everything. The DOR method works differently. Per the DOR guide, the steps for a resident are:
- Start with the federal gross estate and make the Massachusetts adjustments, then subtract the allowable deductions. The result is the amount subject to Massachusetts estate tax.
- Use DOR’s Table B (the old federal state death tax credit table, as of December 31, 2000) to compute a figure for that amount. The table works from the taxable estate less $60,000.
- Subtract the $99,600 Massachusetts credit. The result, not less than zero, is the Massachusetts estate tax.
The credit of $99,600 is set to erase the tax on an amount subject to tax of $2,000,000, so only the part above that line is actually taxed. Here is a worked example, our own arithmetic on DOR’s Table B:
| Amount subject to MA estate tax | Table B figure | Less $99,600 credit | MA estate tax |
|---|---|---|---|
| $2,000,000 | $1,940,000 adjusted: $70,800 + 7.2% of ($1,940,000 − $1,540,000) = $99,600 | $99,600 | $0 |
| $2,500,000 | $2,440,000 adjusted: $106,800 + 8.0% of ($2,440,000 − $2,040,000) = $138,800 | $99,600 | $39,200 |
Read the first row as the point: at $2,000,000 the credit cancels the tax, and above it the tax grows at the table’s marginal rates (7.2% to 8% in this stretch, rising for larger estates). Allowable deductions are subtracted in step 1 before the table is used, so the amount that is taxed can be lower than the gross estate. That is a question for the estate’s attorney or CPA, who will prepare Form M-706.
The lien: why it matters when you sell
This part affects the house directly. DOR says that at death a lien automatically arises by operation of law on all real estate owned by a decedent, alone or jointly. A buyer’s lender will want that lien cleared before closing.
| If the estate is… | How the lien is cleared |
|---|---|
| Under the filing line | The personal representative signs an affidavit under the pains and penalties of perjury that the gross estate does not need a Massachusetts filing. It is recorded in the registry of deeds. DOR does not publish a blank form for it, so your attorney drafts it. |
| At or over the filing line | File Form M-706. DOR then issues a Certificate Releasing Massachusetts Estate Lien. If a sale is pending and the return has not been filed, a release may be required for the sale; DOR describes an application (Form M-4422) for that situation. |
Ask the attorney to prepare the right paper before the house is under contract, so the closing does not wait on it. If the estate is close to the line, say so early.
Dates to know
- 9 months after death: the Massachusetts estate tax return and payment are due, if one is required.
- Extensions: DOR can grant an extension of time to pay not to exceed six months for each request, made on or before the original due date. The first request also counts as an extension to file.
- Estate tax is separate from income tax. The person’s final income tax returns and the estate’s own income tax return are other CPA tasks. See the executor checklist.
DOR says a personal representative may be held personally liable for payment of any tax shown on the return. Do not pay heirs before the attorney confirms the tax position. General information, not legal, tax or financial advice. A Massachusetts probate attorney and a CPA can apply it to your family.
Want to see what an estate-tax-free sale leaves after costs? Use the net proceeds calculator, then go back to the main guide.