Overview

This article describes the New York Metropolitan Commuter Transportation Mobility Tax (MCTMT), including significant changes that occurred in 2012.

Expected Outcome

You'll understand the changes to MCTMT, and the effects they have on your payroll setup and processing.

Assumptions

You're an employer in the MCTMT district.

Details

MCTMT changes

As of 4/1/2012, the New York Department of Taxation and Finance changed the way MCTMT is assessed.
  • Employers with $312,500 or less in payroll expense in a quarter will not be taxable to MCTMT and do not have to file Form MTA-305. (Payroll expense is determined from the Form NYS-45 filing.)
  • Employers with more than $312,500 in payroll expense in a quarter will be taxed according to the following rate chart:
    Payroll expense (in $) MCTMT rate
    Up to 312,500 0% (not taxable)
    312,501 - 375,000 0.11% (.0011)
    375,001 - 437,500 0.23% (.0023)
    Over 437,500 0.34% (.0034)

 

MCTMT legal proceedings

The New York State Department of Taxation and Finance has announced that the constitutionality of the New York MCTMT has been upheld and all appeals have been exhausted.

Click here to view the information provided by the New York State Department of Taxation and Finance

History of legal proceedings:

  • In October 2012, the NY Supreme Court in Nassau ruled that the MCTMT is unconstitutional.
  • The ruling is being appealed by the State of New York and the MTA.
  • Employers subject to MCTMT should continue to pay and file the tax.
  • Employers needed to file a protective claim for MCTMT taxes paid through Q3 2009 by 11/02/2012. (This deadline was extended to 11/26/2012 for taxpayers affected by Hurricane Sandy.)

Payroll account

Set or change MCTMT rate

You should ensure the correct MCTMT rate is entered in your payroll account setup. This is true whether your rate is 0% based on your quarterly payroll expense, or if you pay MCTMT tax. (Note that our system does not automatically set your MCTMT rate to 0% if your quarterly payroll expense is less than $312,500.)

  1. Click Setup.
  2. Click State Taxes (or State Taxes-NY if multistate).
  3. Under "NY Metropolitan Commuter Transportation Mobility Tax Rates*", click Change or add new rate.
  4. Select the correct rate from the dropdown.
  5. Click OK.

Employee MCTMT setup

If your business is located in the MCTMT taxing district, you should select the MCTMT tax for each of your employees, even if your rate is 0% and you won't be paying the tax. (This selection is made in the Local section of the employee's Taxes and Exemptions page.)

Form MTA-305

If your MCTMT rate is 0%, you don't need to file quarterly Form MTA-305. if you pay MCTMT tax, you should continue to file the form.