MASSACHUSETTS DEPARTMENT OF REVENUE REGULATION FACT SHEET

TITLE: 830 CMR 62B.2.2: Pass-Through Entity Withholding

SUMMARY OF REGULATION: This Regulation explains the requirement for a pass-through entity to withhold on distributive share allocated to a member unless the entity or the member is exempt from withholding. This Regulation, in particular:

  • requires certain pass-through entities to submit an annual schedule showing the Massachusetts-source distributive share and filing method for certain members
  • requires withholding pass-through entities to make quarterly payments of amounts withheld
  • requires withholding pass-through entities to file an annual withholding return with the Commissioner showing the total amount withheld
  • exempts investment partnerships and certain trusts from withholding, and provides special rules for publicly traded partnerships
  • exempts, among others, residents and non-residents who agree to file or participate in a composite return from being withheld upon
  • explains the treatment of tiered pass-through entities
  • explains the application of credit to the member for amounts withheld and paid to the Commissioner by a pass-through entity
  • applies to tax years beginning on or after January 1, 2009

REASON FOR CHANGE:
To improve compliance with Massachusetts tax laws by recipients of Massachusetts-source income from pass-through entities.

REGULATORY HISTORY:
New Regulation promulgated 08/08/08.

PREPARED BY:
 Massachusetts Department of Revenue
Rulings and Regulations Bureau
100 Cambridge Street, 7 th floor
Boston, Massachusetts 02114
(617) 626-3250
FAX: (617) 626-3290