USA State Payroll Rates + Resources: State of Massachusetts: Filing State Income Taxes, W2s, and 1099s

Purpose

The purpose of this documentation is to outline the processes and requirements associated with filing state income taxes as well as how to file W-2s and 1099s, if needed, in the state of Massachusetts.

State Income Tax Withholding 

To determine the amount of income tax withholdings, employees should fill out an M-4 form. Employers are required to keep a copy of a completed M-4 form for their employees in their files. The form serves as verification that state income taxes are being withheld according to the employee’s instructions and needs to be available for inspection if the state requests it. 

If the employee claims the same number of exemptions for Massachusetts as they do US Income Taxes, they should complete the federal form W-4 only. 

If there is no requirement to withhold federal income tax because of the type of income, then you don't have to withhold Massachusetts income tax.

W-4 (federal) and M-4 are generally valid until the employee provides new ones.

If the employee is believed to have claimed excessive exemptions, the Massachusetts Department of Revenue should be contacted.

State Income Tax Withholding Reporting and Deposits

    Filing FrequencyProjected annual withholding tax collected from all employeesReturn filing requirementPayment Due
    Annually$100 or lessAnnually due by January 31 of the following year (MassTaxConnect or Form M-941)With return
    Quarterly$101 - $1,200Quarterly due on or before last day of the month following the close of the calendar quarter (MassTaxConnect or Form M-941)With return
    Monthly$1,201 - $25,000Monthly due on or before the 15th day of the following month except for the payments for March, June, September, and December - these are due on the last day of the following month. (MassTaxConnect or Form M-941)With return
    QuarterlyMore than $25,000Quarterly due on or before the last day of the month following the close of the calendar quarter (MassTaxConnect)When Massachusetts income tax withheld is $500 or more by the 7th, 15th, 22nd and last day of a month, pay within 3 business days after that.

    Additional Considerations: 

    You must file returns and pay withholding taxes electronically if:

    • You're a new business or existing business applying for an additional registration (regardless of the amount of annual tax liability).

    • You're an employer/business with:

      • Annual withholding liabilities

      • Sales/use tax liabilities (including sales tax on meals and telecommunications services), and Room occupancy excise liabilities that total $5,000 or more when combined together. 

    See Withholding Taxes on Wages Guide for further electronically filing requirements.

    Once your tax liability reaches the electronic filing threshold in one year, you must file and pay electronically for all following years, regardless of the amount due.

    You must file a return for all periods, even when no tax is due. All returns with 0 tax due must be filed electronically, regardless of the amount of the business's total tax liability. 

    W-2 & M-3 Forms

    If you're an employer who has 50 or more employees, you must submit Forms W-2 in a machine-readable form and file them by the last day of March for the preceding year. The machine-readable form includes file uploads through MassTaxConnect and electronic data transfer.

    Employers with fewer than 50 employees are encouraged to file Forms W-2 in a machine-readable format but can file W-2 information on paper. Paper Forms W-2 and Reconciliation Form M-3 must be filed on or before February 28 following the end of the calendar year.

    1099 Forms

    The January 31st deadline applies to certain types of 1099 Reports. If you're filing Form 1099-Misc and reporting amounts in Box 7: Non-employee Compensation, the new filing deadline of January 31 applies. If you don't have amounts in Box 7, then the deadline remains March 31 for electronic filings.

    If you have fewer than 50 reports, you can submit them on paper, but you are strongly encouraged to file electronically. The mailing address to submit 50 or less 1099 Reports is The Massachusetts Department of Revenue, P.O. Box 7045, Boston, MA 02204.

    If you have more than 50 reports, you must submit electronically at MassTaxConnect. 

    Massachusetts doesn't publish specifications for 1099 Reports. Generally, Form 1099 Reports, including dollar thresholds and corrected returns, should follow federal guidelines in the IRS Publication 1220.

    For further details, see the Withholding Taxes on Wages Guide.