Federal & State Regulations | Employment taxes - Massachusetts

...

Select All / Clear All

Summary of differences between federal and state regulations

Income tax withholding

Per the wage reporting requirements, any person or business subject to Massachusetts withholding requirements, or business that employs one or more individuals and maintains a place of business or does business in Massachusetts, is required to file Form WR-1, Employer's Quarterly Report of Wages Paid. Any person or business subject Massachusetts withholding under Massachusetts General Laws, Chapter 62B, is also subject to wage reporting requirements. Also, employers must submit quarterly wage reports for each employee who either resides or is employed in Massachusetts, whether or not the employees wages are subject to withholding of tax or payment of tax under Massachusetts income tax laws.

Wages paid, as defined by Section 3401(a) of the Internal Revenue Code (IRC), generally means

a) all cash remunerations for services performed by an employee before any allocations or deductions; and

b) the cash value of all remunerations paid in a medium other than cash before any allocations or deductions, provided that such non-cash remunerations are subject to federal personal income tax withholding, federal unemployment tax, Federal Insurance Contributions Act deductions, or Rail Retirement Act deductions.

Employers with 250 or more employees are required to file wage reports (Form WR-1) on magnetic, or other machine-readable media. See Form WR-1 and its instructions for further information on this requirement. Employers with fewer than 250 employees are invited to file their wage reports (Form WR-1) electronically, through file upload protocol, using WebFile for Business. Third party service providers and payroll service companies may also use WebFile for Business to file wage reports in bulk on behalf of their clients. As a courtesy, the Department of Revenue will provide preprinted wage report forms (Forms WR-1) to all Massachusetts employers who reported 21 or fewer employees in the previous quarter.

Unemployment taxes

All states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.

Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.

Wages subject to unemployment tax in this state equal $14,000.

Minimum and maximum rates in this state are 1.12 and 10.96 %. Rates apply to experience rated employers only and do not include applicable surtaxes or penalties.