Employer and Employee Reporting Obligations

(a) Withholding Exemption Certificate .

1. Obligation to Furnish . Withholding exemption certificates shall be in the form prescribed by the Commissioner. Every employee shall furnish his or her employer with a signed withholding exemption certificate setting forth the number of exemptions the employee claims pursuant to M.G.L. c. 62, § 3(B)(b). Withholding exemption certificates shall take effect as of the beginning of the first payroll period ending, or as of the time of the first payment of wages made without regard to payroll period, on or after the date on which such certificate is furnished. Each certificate continues in effect with respect to the employer to whom it was submitted until another certificate takes effect. 2. Changes in Number of Exemptions . If a withholding exemption certificate is furnished to take the place of an existing certificate, the employer has the option to continue the old certificate in force with respect to all wages paid on or before the first status determination date which occurs at least 30 days after the date on which the new certificate is furnished. For the purpose of 830 CMR 62B.2.1(5) the term “status determination date” means January 1 st and July 1 st of each year. If changes occur in the number of dependency exemptions to which an employee is entitled, the employee shall furnish the employer with an accurate exemption certificate within ten days if the change occurs during the calendar year, or before the beginning of the next calendar year if the change is reasonably expected to occur at the beginning of the next calendar year. 3. Commissioner may Determine Correct Number of Exemptions . If the Commissioner finds that an employee has no reasonable basis for the number of dependency exemptions the employee has claimed, the Commissioner shall determine the proper number of dependency exemptions and shall notify the employer. Upon such notification, the employer shall use the number of dependency exemptions determined by the Commissioner with respect to wages paid to that employee. 4. Penalties . There is a $500 penalty for an employee’s false statement on a withholding exemption certificate that results in a decrease in the amount deducted and withheld. In addition, a person who willfully supplies false or fraudulent information, or who willfully fails to supply information that would require an increase in the tax to be withheld shall be guilty of a misdemeanor and subject to a fine of up to $1,000 or imprisonment for up to one year, or both.

(b) Estimate Quarterly Wages . The employer may:

1. estimate the wages that will be paid to any employee in any quarter of the calendar year; 2. determine the amount to be deducted and withheld upon each payment of wages to the employee during that quarter as if the average of the estimated wages constituted the actual wages paid; and 3. deduct and withhold upon any payment of wages to the employee during that quarter the amount necessary to adjust the amount actually deducted and withheld to the amount that would be required to be deducted and withheld during the quarter if the payroll period of the employee were quarterly.

(c) Miscellaneous Payroll Periods . If wages are paid with respect to a period that is not a payroll period, the amount to be deducted and withheld shall be for a miscellaneous payroll period containing a number of days, including Sundays and holidays, equal to the number of days in the period with respect to which the wages are paid. If wages are paid by an employer without regard to any payroll period, the amount to be deducted and withheld shall be for a miscellaneous payroll period containing the number of days, including Sundays and holidays, that have elapsed since the date of the last payment of wages by the employer during the calendar year, or the date of commencement of employment with the employer during the year, or January 1 st of the year, whichever is later.

(d) Furnish Wage or Payment Statement by January 31 st . Every employer and other withholding entity that deducts and withholds a tax from an employee or payee shall furnish a written statement in duplicate to each employee or payee in respect of the wages or other payments paid to that employee or payee during the calendar year. The written statement must show the name of the employer or payer, the name of the employee or payee and his or her social security number, if any, the total amount of wages or payments subject to taxation under M.G.L. c. 62, and the total amount deducted and withheld as tax. This statement shall be made on or before January 31 st of the succeeding year, or, if employment is terminated before the close of the calendar year, within 30 days from the day on which the last payment of wages is made. The Commissioner may grant reasonable extensions of time, not exceeding 60 days, to furnish this statement.

(6) Registration and Reporting Obligations of designated Withholding Agents of Performers or Performing Entities; Reporting Obligation of Performing Entity

(a) A withholding agent pursuant to 830 CMR 62B.2.1(4)(f)1. shall:

1. register electronically for Massachusetts withholding on compensation paid to performers or performing entities; 2. deduct and withhold Massachusetts income tax on payments to or for performers or performing entities as if such payments were wages paid by an employer to an employee, withholding an amount as determined under 830 CMR 62B.2.1(4)(f)2. from each payment to a performer or performing entity; 3. report and pay the amount of taxes withheld during a quarter-monthly period within three days after the close of the quarter-monthly period, using electronic media for all reports and making all payments as ACH debit transactions; 4. file an electronic return on or before the last day of the month following the close of a calendar quarter even if no tax was withheld during the calendar quarter; 5. show on federal Form 1099-MISC, federal Form 1099-NEC, federal Form 1042-S if the performer or performing entity is a foreign person, or other applicable federal form used to report payments made to the performer or performing entity the amount of Massachusetts income tax deducted and withheld, even if such form is not required under federal law. The person treated as an employer must furnish a federal Form 1099-MISC, federal Form 1099-NEC, or other applicable federal form to each person treated as an employee on or before the last day of January on the next succeeding calendar year, unless the person treated as an employee is a foreign person, in which case the person treated as an employer must furnish a federal Form 1042-S to each foreign person treated as an employee on or before March 15 of the next succeeding calendar year; and 6. keep complete records, showing the name and social security number or federal tax identification number of the performer or performing entity, the gross amount paid to the performer or performing entity, the amount of Massachusetts income tax withheld, and the date(s) and location(s) of the performance(s), as well as copies of all issued forms 1099-MISC, 1099-NEC, 1042-S, and any other applicable form forms used to report payments made to a performer or performing entity.

(b) Performing Entity; Member or Participant of Performing Entity.

A performing entity must determine how much of the aggregate income and Massachusetts income tax withholding reported by the withholding agent on federal Form 1099-MISC, federal Form 1099-NEC, federal Form 1042-S, or other applicable federal form used to report payments made to the performer or performing entity is attributable to each member or participant and furnish to each member or participant a withholding allocation form showing the member or participant’s attributed withholding amount. If the recipient of a withholding allocation form is not an individual, the recipient must furnish to each of its members or participants an additional withholding allocation form showing how its withholding amount is attributed to each of its members or participants. This process is repeated until the recipient of a withholding allocation form is an individual. Each entity shall keep copies of withholding allocation forms it has issued. Each individual recipient of a withholding allocation form shall file a copy of the form with his or her Massachusetts income tax return, and may claim a credit for the withheld amount shown on the withholding allocation form.