New York MTA Payroll Tax

Transcription

1 New York MTA Payroll Tax **Effective for the calendar quarter beginning on April 1, 2012, two new lower MCTMT rates have been added for employers. The new rates will apply based on the amount of an employer s payroll expense in a calendar quarter. Previously, the MCTMT was imposed at a single rate (.34%) for all employers. The April 2012 Release has added functionality, utilizing the 3 rd Tax Rate on the Company Tax ID screen, which will allow the Service Bureau to override the tax table tiered rates. PayChoice Company Set Up Prior to using the New York MTA Payroll tax you will need to add the new tax and earnings information to the company. When applying the latest tax tables, the following, which can be viewed from the option [M] Service Bureau Maintenance System, were added: Tax Calculation Table NYMCTD, this table defines the rate used. Tax Authority NYMCTD, this defines the Payee and valid deposit frequency. This table is incomplete and will be updated as the State releases the appropriate data. Tax Notification Table NYMCTD, this defines the tax deposit rules. Master Earnings code MT, which is used for the adjustment check earnings. Master Tax code NX, which is used to calculate the tax and for the adjustment check tax. o Make sure the table name is NYMCTD for this entry. For each company that will need the NY MTA Payroll Expense tax, add and save the following: NYMCTD to the Tax ID Numbers & Rates under Tax Info in the Company Options menu. Earnings code MT to the Earnings Options under Options in the Company Options menu. Tax code NX to the Tax Options under Options in the Company Options menu. o Make sure the table name is NYMCTD for this entry. 1

2 For calendar quarters beginning on or after April 1, 2012, the MCTMT is imposed at the following rates: If the payroll expense for the calendar quarter is: Over $312,500, but not over $375,000 Over $375,000 but not over $437,500 Over $437,500 The tax is:.11% of the payroll expense for that quarter.23% of the payroll expense for that quarter.34% of the payroll expense for that quarter For each employee that is covered for determining the NY MTA Payroll Expense tax, add and save the NX code to their F5 screen. Employees that are set up with the code will be used to determine the payroll expense for the quarter. Once the threshold is reached, the system will calculate the tax due. 2

3 To override the tax table tiered rates, the Service Bureau can enter a rate in the 3 rd Tax Rate field on the Company Tax ID screen. When using the override rate, the calculated amounts are available for reporting on the Department Summary. If the Service Bureau has a client that set up as multiple companies and needs to combine the payroll expense to determine the amount due, they would be required to enter the override rate; using the standard tax tables will not merge the totals of the individual companies to determine the threshold of the payroll expense. *** Please note, when using the 3 rd Tax Rate override, the end of quarter process will perform the standard rounding using the entered rate. If during the quarter, the NY MTA payroll expense exceeds the threshold for the rate that is entered, the Service Bureau will need to adjust the rate accordingly and collect the additional amount. If the NY MTA payroll expense is less than the threshold for the rate that is entered, the Service Bureau will need to adjust the rate accordingly and refund the over deducted amount according to their business operations. 3

4 To record the adjustment period wages and tax for each employee that is covered for determining the NY MTA Payroll Expense tax you can use the F8 or F7 screens when running a regular payroll. Using the F8 Screen Enter the earnings amount to the MT code on the employee F8 screen. 4

5 Using the F7 Screen Enter the earnings amount to the MT code and tax amount for the NX code on the F7 screen. 5

6 Setting up the 3 rd Party Tax Service For clients that use a 3 rd Party Tax Service, the NY MTA Payroll Expense tax is a considered a local tax and would need to be set up by the Service Bureau. If you process the NX code without setting up the 3 rd Party Tax Service information, the file creation from PayChoice will error out. You may also have to contact your 3 rd Party Tax Service representative to confirm that you are set up on their application with this new code. From the Main Menu [D] DAILY Processing Menu [T] Tax Services Menu [T] 3 rd Party Tax Service Menu Select the service you use from the menu In the Utilities section select [5] Update Tax Code Match-Up Select the Local Match Up option and hit Insert to add a new code. Add the new code using the information in the below example. 6