Fiscal Year (FY) 2025 and FY 2026 tax revenues are projected to rebound to positive growth, after non-surtax revenue declines in FY 2022 and FY 2023; but overarching questions about the global economy and federal policy changes cloud the state’s larger fiscal picture. The Massachusetts Taxpayers Foundation (MTF) projects non-surtax revenues of $40.9 billion in FY 2026, an increase of 3.1 percent over the revised FY 2025 estimate of $39.7 billion. Gains in personal income taxes (PIT) and corporate taxes drive growth, as sales tax revenue growth lags and other taxes recover from faltering estate tax collections.

Based on the preliminary Department of Revenue surtax estimate of $2.199 billion in FY 2024 collections, MTF estimates income surtax collections of $2.5 billion in FY 2025 and $2.6 billion in FY 2026.