The Massachusetts Department of Revenue announced that because a target revenue trigger has been met, the state's flat income tax rate will drop on January 1, 2019 to 5.05%, down from the 5.10% rate that has been in effect since 2016. As a result, the Department issued revised income tax withholding tables for calendar year 2019. (Circular M, Massachusetts income tax withholding tables, effective January 1, 2019.)

Because the state has a flat income tax rate, the supplemental withholding rate for 2019 is also 5.05%.

According to the Department, if revenues in 2019 are sufficient to trigger a further rate reduction, the income tax rate will drop to 5% for the 2020 tax year.

2018 Forms W-2 due January 31, 2019

The Department follows the federal deadline of January 31 for filing Forms W-2 (and 1099 with nonemployee compensation shown in box 7). As a result, calendar year 2018

Forms W-2/1099 must be submitted by January 31, 2019.

Employers filing 50 or more Forms W-2/1099, and all payroll reporting agents and third-party service providers, continue to be required to file Forms W-2 and 1099 electronically with the Department over the Department's MassTaxConnect web-based application. Specifications for filing calendar year 2018 Forms W-2 may be found on the Department's website.

Employers filing fewer than 50 Forms W-2/1099 may submit calendar year 2018 Forms W-2 on paper along with Form M-3, Reconciliation of Massachusetts Income Taxes Withheld for Employers by January 31, 2019. Employers filing electronically are not required to file Form M-3.

For questions concerning Forms W-2 and 1099 filing requirements, contact the Department at +1 617 887 6367 or +1 800 392 6089 or see the Department's website.

———————————————

———————————————
ATTACHMENT

EY Payroll News Flash