How is crypto taxed in Massachusetts?
Massachusetts taxes short-term crypto gains at 8.5% and long-term gains at 5%, and income above a yearly threshold also faces the 4% millionaires surtax.
Crypto tax in Massachusetts depends mostly on how long you held the coins. The state follows the federal view that crypto is property, so selling, swapping or spending it can create a gain, and crypto earned as pay or rewards is income. What differs from the federal system is the rate structure and the way losses work. The federal basics are in how crypto is taxed in the US.
What is the Massachusetts crypto tax rate?
The Department of Revenue's tax rates page, updated December 30, 2025, lists these personal income rates:
- Short-term capital gains: 8.5%, for assets held one year or less.
- Long-term capital gains: 5%, the same rate as wages, interest and other income.
- Long-term gains on collectibles: 12%, with a 50% deduction.
The DOR says the 8.5% short-term rate has applied to tax years beginning on or after January 1, 2023, replacing an older 12% rate. Crypto earned from staking, mining or work is generally income, taxed at the 5% rate. Form 1 also lets filers elect a higher 5.85% rate on that income.
How is crypto taxed in Massachusetts on the state return?
Massachusetts asks about crypto directly. The 2025 Form 1 instructions say digital assets include NFTs and virtual currencies such as cryptocurrencies and stablecoins. You must check the Digital Assets box if, at any point in 2025, you received a digital asset, sold or otherwise disposed of one, or received a Form 1099-DA. The federal version of that question is covered in what is the digital asset question on Form 1040.
Short-term gains go on Massachusetts Schedule B and long-term gains on Schedule D. Losses work differently from federal rules. The DOR says capital losses can offset any amount of gains and up to $2,000 of interest and dividends, but cannot be used against wages or other ordinary income. Federally, the limit against ordinary income is $3,000.
Does the Massachusetts millionaires tax apply to crypto?
It can. The 4% surtax, often called the millionaires tax, began in tax year 2023 with a $1,000,000 threshold. The threshold is adjusted each year:
- $1,053,750 for 2024
- $1,083,150 for 2025
- $1,107,750 for 2026
The surtax is charged on taxable income above the threshold, and the DOR says the base includes both short-term and long-term capital gains. So a large crypto sale in one year can push total income over the line, even for someone whose normal income is far below it. A long-term gain in that range could then face 5% plus 4%, and a short-term gain 8.5% plus 4%.
Married couples who file jointly federally must also file jointly in Massachusetts from tax year 2024, unless an exception applies. Other states are compared in do states tax crypto.
Rules differ by state and change often. Check the tax authority or a qualified professional for your own situation.
This guide explains how things work. It is not financial, legal or tax advice. Last updated .