QuickPayroll Implements New York Metropolitan Commuter Transportation Mobility Tax

 

Payroll Update #20920, scheduled to be released September 17, 2009, includes the implementation of the New York Metropolitan Commuter Transportation Mobility Tax, effective March 1, 2009.

As of March 1, 2009 the New York Metropolitan Commuter Transportation Mobility Tax (MCTMT) retroactively applies to certain employers that have payroll expense within the Metropolitan Commuter Transportation District (MCTD). The MCTMT rate is 0.34% (.0034) of payroll expenses for covered employees.

For more details about the tax and to see which counties are affected, please visit the New York State Department of Taxation and Finance website. You may review the tax policy guidelines here to learn more about the MCTMT and definitions.

Frequently asked questions

Who is affected?

You may be affected if you currently

 

When will the new taxes be available in QuickPayroll?

Payroll Update #20920, scheduled to be released September 17, 2009, includes the implementation of the MCTMT.

 

What steps should I take?

 

Step 1 - Download and install Payroll Update 20920 as soon as it is released

 

For more information on how to download and install a Payroll Update, click on the Help menu, select User’s Guide from the drop down list, click on the Index tab, and then type “Updating” in first field.  Help is provided for both downloading and installing Payroll Updates.

 

Step 2 – Add the NY – MCTMT (Transit Tax) to your company file

 

1.    Click on the Lists menu, select Payroll Items, click the Payroll Item tab, and select New. 

 

  1. On the Payroll item type, select Other Tax, click Next.

 

  1. Verify Tax is paid by the company is selected.

 

  1. Select NY – MCTMT (Transit Tax) as the predefined tax from the selection list.

 

  1. Click Next twice to get to the Agency for Company-paid Liability screen.

 

  1. In the Enter name of agency to which liability is paid field, enter Commissioner of Taxation and Finance, click Next and select QuickAdd if prompted.

 

  1. In the Enter the number that identifies you to agency field, enter your New York State Department of Taxation and Finance Withholding Identification No. Continue to click Next twice, and click Finish. 

 

If you have already set up Custom Payroll Items for the NY – MCTMT (Transit Tax), select QuickPayroll Help, from the Help menu, click on the Search tab, and enter Merging Payroll Items in the search field.  Follow the instructions provided in QuickPayroll Help for merging your Custom Payroll Items with the new taxes supplied with the Payroll Update.

 

Step 3 – Add tax to all covered employees

1.    Click on the Lists menu, click Employees, and double click on the subject employee.

2.    Click on the Payroll Info tab.

3.    Click on the Taxes button

4.    Click on the Other tab.

5.    In the Item Name column, select or highlight the select NY – MCTMT (Transit Tax) from the drop down, and click OK twice to save and exit the employee’s record.

6.    Repeat 1 through 5 for all covered employees

Note:  The taxes will be calculated and withheld on the first paycheck dated after the NY – MCTMT (Transit Tax) is setup for the covered employees.  The tax rates are programmed in the tax table within QuickPayroll.  More information on this tax can be found on the agency website at the following links:

·         MCTMT information

·         TSB-M-09(1)MCTMT, Metropolitan Commuter Transportation Mobility Tax

Step 4 – Generate a Payroll Item Detail report to identify the employees and amount of payroll expense subject to the tax

 

1.    Click on the Reports menu, highlight Payroll Reports, and click on Item Detail.

2.    Click the Customize tab.

a.    In the Report Date Range section we will select the dates later; see Step 5 below.

b.    In the Columns section

                                          i.    Select (left margin), Entered/Last Modified, Date, Name, Payroll Item, Income Subject to Tax

                                         ii.    De-select Type, Num, Wage Base, and Amount.

3.    Click the Filters tab.

a.    In the Current Filter Choices section, highlight Payroll Item on the Filter drop-down list, select Social Security Company on the Payroll Item drop-down list. 

b.    You can also select individual employees to be displayed on the report by selecting Name in the Choose Filter section, click Multiple names in the drop down, and select the applicable employees from the list.

 

Step 5 – Customize report dates and print

NOTE:  If you know your payroll expense exceeds $2500 for each Quarter, proceed to step 5.4

1.    Quarter 1, 2009

a.    In the Report Dates section, change the period covered by selecting Custom in the Dates drop-down and entering 01/01/2009 to 03/31/2009 for first quarter 2009

b.    Determine if the amount of payroll expense (wages subject to social security tax; see column Income Subject to Tax) exceed the $2,500 threshold for each calendar quarter.

c.    If greater than $2500, process a second report to identify the payroll expense subject to the tax from 03/01/2009 to 03/31/2009 by selecting Custom in the Report Dates drop-down and entering 03/01/2009 to 03/31/2009.

d.    Print or Export report.

2.    Quarter 2, 2009

a.    In the Report Dates section, change the period covered by selecting Custom in the Dates drop-down and entering 04/01/2009 to 06/30/2009 for second quarter 2009

b.    Determine if the amount of payroll expense (wages subject to social security tax; see column Income Subject to Tax) exceed the $2,500 threshold for each calendar quarter.

c.    If greater than $2500, Print or Export report.

3.    Quarter 3, 2009

a.    In the Report Dates section, change the period covered by selecting Custom in the Dates drop-down and entering 07/01/2009 to 9/30/2009 for third quarter 2009

b.    Determine if the amount of payroll expense (wages subject to social security tax; see column Income Subject to Tax) exceed the $2,500 threshold for each calendar quarter.

c.    If greater than $2500, process a second report to identify the payroll expense subject to the tax prior to adding the NY – MCTMT (Transit Tax) to the applicable employees and processing paychecks, by selecting Custom on the Dates drop-down and entering 07/01/2009 to the last paycheck date prior to adding the NY – MCTMT (Transit Tax)

d.    Print or Export report.

4.    All Quarters (If you know your payroll expenses for each quarter in 2009 have exceeded $2500)

a.    In the Report Dates section, change the period covered by selecting Custom in the Dates drop-down and entering 03/01/2009 to the last paycheck date prior to adding the NY – MCTMT (Transit Tax)

b.    Print or Export report.

5.    Using the reports you have created, calculate the tax due at .34% per covered employee.

 

Payroll Liability Adjustments are needed to correct the payroll expense/wages and tax amount for the periods prior to adding the NY – MCTMT (Transit Tax) to the applicable employees and processing paychecks.

1.    Click the Activities menu and click on Adjust Liabilities.

2.    In the Date field, enter the date as 09/17/2009 for making the necessary initial adjustments.

3.    In the Effective Date field, enter the date as 09/17/2009.

4.    Click Employee and choose the employee’s name from the drop-down list.

5.    Click Show Wage Bases tab.

6.    In the Item Name field, choose NY – MCTMT (Transit Tax).

7.    In the Amount field, enter the amount of the adjustment as a positive number:  NY – MCTMT (Transit Tax) calculated on the payroll expense (wages subject to social security tax) amount for the period of 03/01/2009 up to the last paycheck date prior to adding the tax to employees and processing paychecks as applicable.

8.    In the Wage Base field, enter the amount of the adjustment as a positive number:  Payroll expense (wages subject to social security tax) applicable to the tax for the period of 03/01/2009 up to the last paycheck date prior to adding the tax to employees and processing paychecks as applicable.

9.    In the Memo field, enter a note to yourself about the adjustment, i.e. new tax implemented by state

10. Click Next Adjustment if additional adjustments are needed. 

11. When you have finished adjusting the tax liability for each affected employee, click OK.

 

Step 4 – (Non-mandated PrompTax Filers) Prepare your initial tax return filing (MTA-305, Employer’s Quarterly Metropolitan Commuter Transportation Mobility Tax Return)

 

Note:  New York State Department of Taxation and Finance is communicating that the initial return will cover the period from March 1, 2009 through September 30, 2009.

 

Generate and print a Payroll Item Detail report to assist in preparing the initial return filing.

1.    Click on the Reports menu, highlight Payroll Reports, and click on Item Detail.

2.    Click the Customize tab.

3.    In the Report Dates section, change the period covered by selecting Custom in the Dates drop-down and entering 03/01/2009 to 09/30/2009.

4.    In the Columns section, select (left margin), Entered/Last Modified, Date, Name, Payroll Item, Income Subject to Tax, Wage Base, and Amount.

5.    Click the Filters tab. In the Choose Filter section, highlight Payroll Item in the Filter drop-down list.

6.    Then select NY – MCTMT (Transit Tax) in the Payroll Item drop-down list.  Print a copy of the report.

7.    Use this report to complete Form MTA-305, and submit with respective payment.

 

For information regarding the filing and payment requirements for employers participating in the PrompTax program, please visit the New York State Department of Taxation and Finance website.