The Office of the Comptroller acts as the Tax Clearinghouse for reporting taxes and remitting withholdings to the Internal Revenue Service (IRS) the Department of Revenue(DOR). Medicare Tax to the Social Security Administration (SSA) and other states. Payments for settlements and judgments for disputes and lawsuits are processed as prescribed by the Office of the Comptroller under 815 CMR 5:00 to ensure that the appropriate tax reporting and withholdings are made and remitted as required by law.
The following links identify the policies, forms and other guidance for State Departments entering into and processing settlements and judgments and provides guidance to Claimants, Claimants counsel, arbitrators, Union representatives and other officials relative to how claims will be processed irrespective of how the terms are negotiated to ensure the Commonwealth meets its legal obligations under state finance law and state and federal tax law.
All questions related to a claim should be referred directly to the Agency Counsel for the Department subject to the claim. CTR has no authority to make representations to any Claimant or Claimant Attorney on behalf of a Department and will refer all questions related to a claim back to the Agency Counsel for resolution. CTR will work with the Agency Counsel, or if not represented by Attorney, with the Chief Fiscal Officer to resolve any questions related to the payment or processing of a settlement or judgment. CTR will not communicate directly with a Claimant or Claimant’s Attorney to identify the payment options, the timing of payment, or to resolve any questions related to payment, including the tax reporting, withholdings or tax treatment of the payments. When questions on tax reporting or withholding arise, a link to this website may be provided to a Claimant, Claimant’s Attorney, union representative, arbitrator or court.
Settlement and Judgment Policy
: This Policy applies to all damages and payments awarded under a non-tort settlement and judgment by any State Department in all Branches of State government. Review this Policy for guidance on how settlements and judgments are paid, payment processing, and the legal basis for tax withholdings and reporting.
- 815 CMR 5:00 Settlement and Judgments Regulation
Non-Tort Settlement and Judgment Authorization Form
: This Form must be submitted to the Office of the Comptroller with copies of a Non-Tort Settlement and Judgment for review and approval of payment processing instructions irrespective of whether or not a State Department is paying a claim with Department Funds.
Notice Of Commonwealth Responsibilities For Settlement/Judgment Tax Withholdings, Intercept And Tax Reporting W-2, 1099-Misc And 1099-Int
Table - Office Of The Comptroller 815 CMR 5.00 Payment And Tax Reporting Of Settlements And Judgments
: Use this table to identify how various types of Settlement and Judgment awards will be processed and the associated requirements for tax reporting and withholdings.
Settlement and Judgment Multiple Claimant Spreadsheet
: This form is used when a Department is submitting multiple claimant payments under one Settlement and Judgment Authorization Form 815 CMR 5.00
Employment Claim Tax Withholdings Calculator file size 6MB
: This Excel spreadsheet may be used to estimate the amount of tax withholdings that will be deducted from lump sum and back pay employment claim awards.
Payroll Instructions Settlements and Judgments (HR/CMS)
: Instructions for processing employment related payroll payments through HR/CMS. These instructions must be used by any State Department for employment related settlement or judgment payments as prescribed by the Office of the Comptroller
- Payroll Payment Calendar HR/CMS This calendar identifies the bi-weekly payment calendar for payroll related settlements and judgments. Payments are made on a bi-weekly cycle based upon the date the claim is put in line for payment and subject to available funding and prior review by the Office of the Comptroller.
Frequently Asked Questions
- LMRF – Liability Management and Reduction Fund – G.L. C. 258 Tort Claims Policy
- W-9 Form: This form is used to register payees for payments in the Massachusetts Management Accounting and Reporting System (MMARS). Any settlement or judgment payments processed through the MMARS accounting system require a payee to be registered with their Legal Name, Legal Address and Tax Identification Number (TIN/SSN) or Federal Employer Identification Number (FEIN) that the payee has already filed with the Internal Revenue Service (IRS) and Department of Revenue (DOR). Incorrect information will result in delays in payment or potential audits of taxes so payees should be careful to use the same name, address and TIN used when filing annual tax returns.
- Vendor Web (Internet) : Payees receiving payments through the state accounting system (MMARS) may use this link look up payment remittance information by logging on to Vendor Web with their “Vendor Code” and the last 4 digits of their TIN or FEIN associated with that Vendor Code. Vendor Codes are not public information and can be obtained from the Department subject to a claim who has processed a payment.
- Vendor Lookup (Intranet): State Departments and Agency Counsels for the Commonwealth with access to the Intranet may use this link look up payment remittance information by logging on to Vendor Web with either the name or the Vendor Code of the payee.
- Listing of State Departments: Use this link to identify State Departments.
- Weekly Update Available Funds in the 1599-3384 Settlement and Judgment Reserve Account: As of _______ there are “____” available funds remaining in the 1599-3384 account. If funding is “0.00” a request has been made to submit a supplemental budget for additional funds. Claims will be reviewed and put in line for payments and will be processed when sufficient funds have been appropriated. Claims are processed based upon prior review by the Office of the Comptroller and the date the claim is put in line for payment. CTR will not provide any timing for payment estimated until a claim is in line for payment and CTR will provide this information solely to the State Department Agency Counsel handling the claim. Please see Settlement and Judgment Policy for more information.
- Tort and Non-Tort Settlements and Judgments Required Documents Checklist