Massachusetts Circular M - Income Tax Withholding Tables (Page 13 of 14) in pdf

Massachusetts Income Tax Withholding System

Percentage Methods for Pension, Annuity, Other

Rev. 11/11

Periodic Payments and Nonperiodic Payments

Massachusetts

(e.g., Lump-Sum Distributions)

Department of

Paid January 1, 2012 and thereafter

Revenue

A. General Information

E. Reporting to Recipients

Payers and plan administrators of pension, annuity, other periodic

Provide a copy of U.S. Form 1099-R, showing the total payment

payments and nonperiodic payments made to recipients with Mass-

and amount withheld for Massachusetts during the year, to each re-

achusetts addresses who have not elected to be exempt from the

cipient by the end of the next January for the Massachusetts income

U.S. income tax withholding provisions must withhold Massachu-

tax return.

setts income taxes, effective January 1, 1984. The Massachusetts

F. Other

withholding system differs from the U.S. system.

Massachusetts provisions for payer and authorized sender responsi-

B. Form M-4P

bilities and recordkeeping are the same as those for the U.S.

The Massachusetts Withholding Exemption Certificate, Form M-4P

From recipient’s total payment:

(or a reproduction or other payer-substitute form), should be made

1. Subtract the total of the exemption factors for the applicable pe-

available to each recipient.

riod. If “0” exemptions claimed or no M-4P, omit this step.

A recipient, whether receiving periodic or nonperiodic payments, may

a. Monthly: $83 multiplied by number of exemptions claimed, plus

claim the applicable personal, age 65 or over and blind exemptions

$284.

(for both spouses) and the exemptions for dependents. If a recipient

does not file Form M-4P with the payer, Massachusetts withholding

b. Quarterly: $250 multiplied by number of exemptions claimed, plus

will be based on “0” exemptions. In such cases, 5.25% of each pay-

$850.

ment will be withheld from January 1 through December 31 of the

c. Semiannually: $500 multiplied by number of exemptions claimed,

calendar year.

plus $1,700.

Form M-4P may be used to request that an additional amount be

d. Annually: $1,000 multiplied by number of exemptions claimed,

withheld.

plus $3,400.

Form M-4P should also be used to claim exemption from Massachu-

2. If the recipient will file as head of household on their tax return,

setts income tax withholding by a recipient with a Massachusetts

add to the amount computed in step 1 and subtract the total from the

address but who is domiciled (legal resident) elsewhere and whose

payment: monthly: $200; quarterly: $600; semiannually: $1,200; an-

pension is from certain pension plans not subject to tax under Title 4

nually: $2,400.

of the United States Code, section 114.

3. If the recipient and/or spouse is blind, for each blind person add to

Recipients with other than Massachusetts addresses may request, by

the amount computed in steps 1 and 2, if applicable, and subtract the

filing Form M-4P, withholding on payments taxable by Massachusetts.

total from the payment: monthly: $183; quarterly: $550; semiannually:

C. Figuring Withholding

$1,100; annually: $2,200.

The Massachusetts Income Tax Withholding System Percentage

4. After subtracting the amounts specified in steps 1, 2 and/or 3 from

Methods for Pensions, etc., for computing amounts to withhold, ap-

the recipient’s total payment, multiply the result by .0525 and with-

pears in the next column. If a payment period differs from the four

hold the resulting amount.

specified, adapt accordingly.

Important Note

D. Paying Over Amounts Withheld

Payers are requested to urge recipients to ask that additional amounts

The trustee or administrator of the pension or annuity plan must reg-

be withheld on Form M-4P to cover taxes for certain payments tax-

ister with DOR online through WebFile for Business, using the plan’s

able at the 12% rate or for other income not subject to the withhold-

federal tax identification number and checking the appropriate box.

ing system.

Generally, a plan is required to obtain its own Federal Identification

number. Returns are due annually, and payments are subject to the

same schedule as withholding on wages with regard to frequency.

Returns and payments must be made electronically.

Massachusetts Circular M - Income Tax Withholding Tables Page 13

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