Income tax withholding is the withholding of a portion of employee wages for state and federal income tax purposes. As a general rule, the owner of a business that is incorporated is also considered an employee for withholding tax purposes. If you were the sole proprietor of a business that has no other employees, you would not be considered an employee and would not be required to register for withholding tax. (However, as the owner you are required to make individual estimated income tax payments if you expect to owe more than $400 in Massachusetts income tax on the income you receive from the business. See Sole Proprietorships, Estimated Payments.)

 

The amount you withhold from your employees for state income tax purposes should be based on Form M-4 , Massachusetts Employee's Withholding Exemption Certificate (submitted to you by each employee), and on Circular M , Massachusetts Income Tax Withholding Tables. A detailed explanation of how to use the tables or a percentage method for automated payroll systems is provided in Circular M.

 

The Internal Revenue Service and Social Security Administration also require employers to withhold federal income tax and Social Security contributions from employee wages. Resources for obtaining additional information about your federal obligations are listed in the section of this guide.


Income Tax Withholding:
Summary of Filing Requirements & Payment Options
- *(See Important Note)

 

*Annual amount collected*Filing frequency and
payment requirements
*Return filing methods*Payment methods
CheckEFT:
ACH Credit
EFT:
ACH
Debit
$0-$100Annually, by January 31 of following year. Payment is due with return.WebFile for Business List itemList item
Form M-941AList item List item
$101-$1,200Quarterly, on or before last day of month following close of calendar quarter, i.e., April 30, July 31, October 31, and January 31. Payment is due with return.WebFile for Business List itemList item
Form M-941List item

 

List item
$1,201-$25,000Monthly, on or before 15th day of the following month except the payments for March, June, September and December - these are due on the last day of the following month. Payment is due with return.WebFile for Business List itemList item
Form M-942List item

 

List item
More than $25,000Quarterly, on or before last day of month following close of calendar quarter, i.e., April 30, July 31, October 31, and January 31. Payment is due weekly: When Massachusetts income tax withheld is $500 or more by the 7th, 15th, 22nd, and last day of a month, payment must be made within three business days thereafter.WebFile for Business

 

 

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*Important Note: Electronic filing requirements are in place for this tax type. Refer to Technical Information Release (TIR) 04-30 for detailed information. Learn more electronic filing and payment methods, visit WebFile for Business and select, "Take the Tour."

Sales and Use Tax
Annual Wage and Tax Statements