New Employer-Paid Payroll Tax

On May 7th, legislation was enacted creating the Metropolitan Commuter Transportation Mobility (MCTM) tax – a new employer-paid payroll tax – as part of a bailout plan for the Metropolitan Transportation Authority (MTA), which manages buses, trains, bridges, and tunnels in New York City and surrounding areas.
 
The MCTM tax is imposed on employers engaged in business within the Metropolitan Commuter Transportation District (MCTD).  The MCTD is comprised of 12 counties served by the MTA, which includes New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester counties.
 
The tax rate is 0.34% of an employer’s total payroll expense for employees employed within the MCTD (i.e. $0.34 per $100 of wages).  An employer that is required to deduct and withhold NY State income tax from employees’ wages and has a payroll expense of exceeding $2,500 in any calendar quarter is required to pay the MCTM tax.  The United Nations, federal government, and interstate agencies or public corporations created pursuant to an agreement between two or more states or with Canada are excluded.
 
Employers are required to pay the MCTM tax quarterly, at the same time as quarterly wage reports are due.  However, employers that are required to report and remit withholding tax via EFT must pay the MCTM tax at the same time they remit withholding payments.  The MCTM tax will apply to wages paid on or after March 1, 2009, for most employers. 
v  For quarterly filers, the first payment is due with the third quarterly withholding payment, on October 31, 2009, and is to include all tax owed since March 1. 
v  For EFT filers, the first payment is due with the first withholding payment due on or after October 31, 2009, and is also to include all tax owed since March 1. 
 
The MCTM tax will be administered by the NY State Dept. of Taxation and Finance for the MTA.  Preliminary information is available on the DTF website at www.tax.ny.gov/bus/mctmt/, with more info to follow.  I will distribute more information as it is posted.



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