Each employer subject to unemployment insurance is also subject to Employer Medical Assistance Contribution (EMAC) reporting requirements in the state of Massachusetts. EMAC is used to help fund health insurance programs.
(In January 1st 2014, Massachusetts Health Insurance (UHI) was changed to the Employer Medical Assistance Contribution.)
For rates and more information on this contribution, see this site.
What does this mean for me?
The Massachusetts Health Insurance question on EMAC-2014, "Are you employing 6 or more employees in MA?" is not as simple as it sounds. Employers are only liable to pay MA EMAC/UHI if the following conditions are met:
- The employer has been subject to EMAC for more than three years.
- The employer has an average monthly total of 6 employees or more that are paid with a pay period that includes the 12th of the month.
Who is a subject employer?
A "subject employer" is a MA employer who is subject to Massachusetts General Law 151A (MGL 151A), which covers SUI and related taxes. All newly subject employers are exempt from EMAC for the first two years. Beginning in the third year, subject employers determined to be liable will be required to pay EMAC quarterly for any quarter in which they pay an average of 6 or more employees.
I'm a subject employer as of this year. What is my rate?
For newly subject MA employers, the rates can be found at this agency site.
How does Online Payroll handle EMAC?
Previously, MA employers had to answer the question "How many employees do you expect to pay in the current quarter?" or, you had to contact support to have the number of employees at your business reset. Now, the system auto-calculates this tax for you. See the example for more information.EMAC will show up for all paychecks. However, for employers with a varied number of employees paid in MA, the system will run a query at the end of each quarter and make adjustments automatically.
- Note: The system will calculate EMAC even if less than 6 employees were paid during a pay period, but make adjustments at the end of the quarter. Additionally, employees are only subject to EMAC if they were paid in a pay period including the 12th of a given month.
Pay Period 1 ~ paid 4 EEs
Pay Period 2 ~ paid 7 EEs
Pay Period 3 ~ paid 6 EEs
In this example, we will assume all paychecks included the 12th of a given month.
Using the above example, if the total employees paid in any month of the quarter does not met the threshold of 6 or more employees, the system will automatically adjust your EMAC tax liability to $0.00. When you or the system attempt to create a payment for SUI, the EMAC portion of the tax will no longer be listed.
If you hire and pay 6 or more employees in subsequent quarters, the EMAC portion of SUI will remain in the liabilities to be paid without any need to reset or adjust this tax.
How does Desktop Payroll handle EMAC?
QuickBooks Desktop Payroll Assisted
- If you are subject to EMAC tax, EMAC is calculated at the end of the quarter based on your company's situation. If you are EMAC liable, Intuit will send you send an email with the amount, when we will debit and pay it along with your quarterly SUI filing.
QuickBooks Desktop Payroll Basic, Standard, and Enhanced
- You must track and pay this tax yourself.
- For tracking purposes, create a Company Contribution payroll item with a Tax tracking type of None.
- In the Default rate and limit window, enter the rate and annual limit for EMAC. If you are not sure of your rate and limit, click this site to learn more.
- Add this new payroll item to each employee profile in the Additions, Deductions, and Company Contributions section.
- Create the necessary liability adjustment per employee if there are paychecks created before adding the item.
- The State of Massachusetts Department of Unemployment mandates that all unemployment taxes including health insurance taxes (EMAC) be electronically filed with the agency. The agency states what taxes are due when the wage list data is filed for the quarter. For further information on how to file view the state website here.
Your company may be charged an additional "Supplemental tax" amount if the applicable health insurance employees use applies. The agency will put this amount due on the quarterly statement on their website.
The amount due for the supplemental tax will NOT be paid by Intuit and needs to be paid directly to the agency.