Massachusetts Top Bracket (5% Flat + 4% Fair Share Surtax = 9.0%) 31 U.S.C. § 3124 Exempt 9.00% Tax Shelter

Massachusetts T-Bills vs HYSA Calculator: Fair Share Amendment Net Yield

Massachusetts imposes a flat 5% personal income tax plus an additional 4% surtax on taxable income exceeding $1,000,000 under the Fair Share Amendment, creating a 9.0% marginal rate. Treasury interest is completely exempt from both tiers. Under 31 U.S.C. Section 3124, U.S. Treasury interest is exempt from Massachusetts income tax, including the 4% Fair Share Amendment surtax on income over $1,000,000.

Compare Other High-Tax States:

California (13.3%) New York City (14.8%) New York State (Outside NYC) (10.9%) Massachusetts (9.0%) New Jersey (10.8%)

Cash & Yield Inputs

Cash Balance $100,000

$10k $250k $500k $1M

U.S. T-Bill Nominal Yield 4.65%

Bank HYSA Advertised APY 4.25%

Federal Marginal Bracket

⚖️ Federal Preemption: 31 U.S.C. § 3124

Under federal law, states and municipalities are constitutionally barred from taxing interest earned on direct U.S. Treasury bills. In Massachusetts, your effective state tax rate on T-Bills is exactly 0.00%.

Tax-Equivalent Yield (TEY) in Massachusetts

5.11% Your bank HYSA must pay at least 5.11% APY to match a 4.65% T-Bill after paying Massachusetts taxes.

Net Annual Cash Delta +$635 in pocket

State Tax Eliminated $383 saved/yr

Yield & Tax Deductions: Direct Comparison

Metric	U.S. Treasury Bill	Bank HYSA	Advantage
Gross Annual Yield	4.65%	4.25%	+0.40% T-Bill
Massachusetts Tax Rate	0.00% (Exempt)	9.00%	T-Bill (-9.00% Tax)
Gross Annual Interest	$4,650	$4,250	+$400
State & Local Tax Owed	$0.00	-$383	+$383 saved
Net After-Tax Cash	$2,930	$2,295	+$635
Net After-Tax Yield	2.93%	2.30%	+0.63%
Liquidity & Safety	US Government Credit (No Cap)	FDIC Insured ($250k Cap/Bank)	T-Bill Unlimited Safety

Multi-Balance Cash Matrix (Massachusetts)

Exact dollar amounts earned and tax saved across deposit tiers at current yields.

Deposit Balance	T-Bill Net Cash	Bank HYSA Net Cash	State Tax Lost	Net Cash Advantage
$25,000	$732	$574	$96	+$159
$50,000	$1,465	$1,148	$191	+$317
$100,000	$2,930	$2,295	$383	+$635
$250,000	$7,324	$5,738	$956	+$1,586
$500,000	$14,648	$11,475	$1,913	+$3,173
$1,000,000	$29,295	$22,950	$3,825	+$6,345

Automate Your Fixed Income Strategy

Deploy your cash into staggered maturities and compare against other low-risk cash structures.

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❓ Common Questions

Frequently Asked Questions: Massachusetts T-Bills vs HYSA

Answers on state tax exemptions under 31 U.S.C. 3124 and Tax-Equivalent Yield math.

Does the Massachusetts 4% Fair Share surtax apply to Treasury bills?

No, U.S. Treasury interest is excluded from Massachusetts gross income by federal statute, so neither the 5% base tax nor the 4% surtax applies.

What is the Massachusetts Tax-Equivalent Yield for high earners?

Dividing nominal yield by (1 minus 0.09) gives the TEY. A 4.65% Treasury bill delivers the same net cash return as a 5.11% bank HYSA in Massachusetts.

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📥 State Tax Arbitrage Guide (PDF) One-Page Reference • Instant PDF

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