Returns and Payments

(a) Withholding Schedules .

1. Payroll Withholding . a. Withholding Categories . For withholding tax purposes, employers shall be divided into the following categories: i. Type 1 : Every employer required to deduct and withhold taxes under M.G.L. c. 62B, § 2 that can reasonably expect that total taxes withheld will not exceed $100 for the calendar year. ii. Type 2 : Every employer required to deduct and withhold taxes under M.G.L. c. 62B, § 2 that can reasonably expect that total taxes withheld will exceed $100 but not $1,200 for the calendar year. iii. Type 3 : Every employer required to deduct and withhold taxes under M.G.L. c. 62B, § 2 that can reasonably expect that total taxes withheld will exceed $1,200 but not $25,000 for the calendar year. iv. Type 4 : Every employer required to deduct and withhold taxes under M.G.L. c. 62B, § 2 that can reasonably expect that total taxes withheld will exceed $25,000 for the calendar year. b. Employers : General. i. Type 1 : Employers. Every Type 1 employer shall file a return and pay over to the Commissioner the taxes withheld during the calendar year on or before the last day of January following the close of the calendar year. ii. Type 2 : Employers. Every Type 2 employer shall file a return and pay over to the Commissioner the taxes withheld for each calendar quarter on or before the last day of the month following the close of the calendar quarter. iii. Type 3 : Employers. Every Type 3 employer shall file a return and pay over to the Commissioner the taxes withheld for each calendar month on or before the 15 th day of the following calendar month, except that for the months of March, June, September and December, the return shall be filed and the taxes withheld shall be paid on or before the last day of the following calendar month. iv. Type 4 : Employers. Every Type 4 employer shall pay over to the Commissioner the cumulative amount of taxes withheld and not previously paid over, when this cumulative amount is $500 or more at the end of any quarter-monthly period. Such payment shall be made within three business days after the close of the quarter-monthly period. Type 4 employers shall also file a return on or before the last day of the month following the close of each calendar quarter accompanied by any unpaid withheld taxes. c. Employers : Seasonal. A seasonal employer may be permitted by the Department to file withholding tax returns for only those calendar months in which it is required to deduct and withhold Massachusetts income tax. Permission is granted to file as a seasonal employer when a business has indicated to the Department, either on Form TA-1 Application for Original Registration, or on Form TA-2 Application for Additional Registration, that taxes are withheld only during certain months of the year. Permission to file as a seasonal employer shall take effect immediately and remain in effect as long as the employer remains a seasonal employer. 2. Annual Withholding from Nonpayroll Payments . a. Payers That may Report Annually . With the exception of payers of gambling winnings, payers of nonpayroll payments that withhold Massachusetts income taxes, and that report annually on Federal Form 945 for purposes of federal income tax withholding, may report withheld Massachusetts income taxes annually. An annual report is required from each payer registered to withhold, whether or not the payer withheld Massachusetts taxes during the calendar year. Withheld amounts that may be reported annually include, for example, certain annuities as described in Code § 3402(o)(1)(B) and pensions, annuities, IRAs, and certain other deferred income subject to withholding under Code § 3405. Annual returns filed under 830 CMR 62B.2.1(6)2. are due on or before the last day of January following the close of the calendar year. A reconciliation of deposits made and amounts withheld throughout the year shall accompany the annual filing. No withholding is required on nonpayroll payments that do not exceed the lesser of $10 per payee or $100 to all Massachusetts payees during one tax year. b. Payment Requirements for Annual Reporters . Annually reported nonpayroll withheld taxes should be paid, accompanied by a Massachusetts tax deposit coupon, as follows: i. if the payer of nonpayroll payments can reasonably expect that the total taxes withheld will not exceed $100 for the calendar year, payment shall accompany the annual return; ii. if the payer of nonpayroll payments can reasonably expect that the total taxes withheld will exceed $100 but not $1,200 for the calendar year, payment shall be made no later than the last day of the month following the close of a calendar quarter for the amount withheld during the calendar quarter; iii. if the payer of nonpayroll payments can reasonably expect that the total taxes withheld will exceed $1,200 but not $25,000 for the calendar year, payment shall be made no later than the 15th day of the calendar month for the amount withheld during the previous calendar month; or iv. if the payer of nonpayroll payments can reasonably expect that the total taxes withheld will exceed $25,000 for the calendar year, payment shall be made no later than three business days after the close of the quarter monthly period when the cumulative amount of taxes withheld and not previously paid over is $500 or more at the end of any quarter-monthly period. 3. Gambling Winnings . Gambling winnings withheld under Code § 3402(q) and reported annually for purposes of federal income tax must be treated as if they were wages paid by an employer to an employee and withheld according to the applicable employer withholding schedule.