If I live in MA, but my bank is strictly online (no strict MA location), do I still apply the exception that MA taxes bank interest rates differently?

I'm not sure if this exception only applies to institutions that are strictly located in MA, or if it applies to any institution that the MA resident is using regardless if any physical branches are located in MA. There are still specific ATMs I can locate that are associated with the online bank to do transactions, but I'm not sure if that counts.

476

Expert Alumni

Mar 4, 2024 5:22:28 PM

It is for banks located in MA. So, if your bank is online, it would not be considered a MA bank.

"Massachusetts law provides that interest earned on savings deposits or accounts in Massachusetts banks is included in Part B income, taxed at 5%." MA bank Interest

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If I live in MA, but my bank is strictly online (no strict MA location), do I still apply the exception that MA taxes bank interest rates differently?