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Hot topics at DOR: Calendar year 2019

Follow 2019 news from DOR that was both current and important to Massachusetts taxpayers and tax practitioners. For prior and more current hot topics, visit the Related section of this page.

Table of Contents

12/23/19: Income tax rate drops to 5% on January 1, 2020

The Massachusetts income tax rate will drop to 5% on January 1, 2020. For more information, please see the release from the Baker-Polito administration. Please review the Income Tax Withholding Tables at 5.0% - effective January 1, 2020.

12/20/19: Impact of changes to the federal Form W-4

 As you may already know, there are changes to the federal Form W-4 for 2020 that reflect the elimination of the personal exemption and increase in the standard deduction resulting from tax reform enacted in 2018. You can learn more about the form changes at the IRS website. Massachusetts personal exemption amounts do not rely on federal law and the process for calculating the correct Massachusetts withholding amount has not changed.  Here’s what employees and employers need to do.

  • New employees as of January 1, 2020 will complete both the Massachusetts Form M-4 and the new IRS Form W-4 to give employers an accurate withholding picture.  The Form W-4 can no longer be used as a substitute for the Form M-4.
  • Current employees do not have to do anything unless they want to adjust their withholdings. Employers can rely on the most recently completed form for withholding information if the employee does not want to make adjustments. If an employee does want to revise withholdings, s/he should complete both the new IRS Form W-4 and the Massachusetts Form M-4 to make the changes.

Our Guide to Withholding Taxes on Wages has been updated with this information.

11/21/19: New Notice of Payments on Account

On November 25th, DOR will issue approximately 11,000 Notices of Payments on Account to taxpayers who have estimated tax payments or credits, extension payments or return payments on their 2017 personal income tax account but have not filed an income tax return.  Taxpayers are advised to file a return if they meet the filing requirement or if they are entitled to a refund. Taxpayers are not required to respond but if they don’t file, they may later be sent a Notice of Failure to File or they may lose their refund. 

10/29/19: Change in Filing Period for the HIRD

The Health Insurance Responsibility Disclosure launched last year is a required annual filing for employers to report on employer-sponsored insurance offerings. The filing period was moved back a couple of weeks this year to November 15 through December 15. Visit Health Insurance Responsibility Disclosure (HIRD) FAQs for more information.

4/29/19: Personal Income Tax Payments Submitted by Paper Check at the Deadline

Although DOR received over 200,000 payments by mail since April 8th, we expect to have most timely payments (postmarked by April 17th) processed by May 3rd, more than a week ahead of last year. If your check hasn’t been cashed by May 3rd, give us a call. Based on your specific situation, we’ll be able to advise you what to do next. Keep in mind that any mail with  a return receipt request takes longer to be delivered from the Post Office to DOR. An unsigned check, a check that is incorrectly made out, or one that is not accompanied by appropriate documentation (a tax return or a Form PV, Income Tax Payment Voucher) will also cause delays.

Next year please consider paying electronically. You can schedule the withdrawal date that works best for you whether making a payment through our MassTaxConnect system or with your electronically filed tax return. If your goal is electronic payment, don’t choose your bank’s online bill pay system. Your bank will issue a paper check with no payment voucher, which will delay processing. 

2/22/19: Understanding a Notice of Intent to Assess - Information Request

DOR will soon begin sending out Notices of Intent to Assess-Information Request for 2018 tax returns.   A Notice of Intent to Assess-Information Request is sent if DOR needs information to verify certain credits claimed on a tax return. It does not mean the tax return was incorrectly prepared. The request may ask for more information regarding:

  • Massachusetts withholding credit,
  • Earned Income Credit  or
  • Circuit Breaker Credit. 

Last year we added an option to respond to this notice online through MassTaxConnect, no account required. Uploading your response from a phone or computer helps speed up the process. Whether the response is sent by mail or through MassTaxConnect, it’s important to include page 2 of the notice so we can match the information to the account as quickly as possible. 

Don’t risk losing these credits by not responding on time.

2/12/19: Third party access now available to register for client’s small business energy exemption

A third party, with access rights to a client’s MassTaxConnect account for at least one tax type, may register for the exemption on behalf of the client.  The certificate will be mailed to the client. Only the client will be able to obtain a copy of the exemption certificate or view the certificate through MassTaxConnect. Learn more about the small business energy exemption.

2/1/19: Massachusetts income tax refunds for tax year 2018

DOR launched filing season on Monday, January 28, and we’ve been testing our system with small batches of returns. Today we’ll be taking in all returns electronically filed to date and we expect to issue our first refunds on Monday, February  4. In general, the expected turnaround time for a MA income tax refund is 4-6 weeks for an e-filed return or 8-10 weeks for a paper return. Taxpayers can check on the status of a refund online. Unlike the IRS, DOR is not required to hold certain refunds until mid-February for purposes of detecting fraud, but DOR does take identity fraud very seriously. If any taxpayer information (address, bank account, etc.) changed since last year, we may take additional steps to verify identity to protect taxpayers and the Commonwealth. This may result in extended refund turnaround times and a notice asking for identity verification or additional information for the tax return

1/4/19: Short-term rental legislation

Recent legislation imposes state and local room occupancy excise taxes on short-term rentals of property for more than 14 days in a calendar year. The new law applies to rentals starting on or after July 1, 2019 for which a rental contract was entered into on or after January 1, 2019. You’ll find more information about the taxes and fees involved and the obligations of operators and their agents on our new Short-term rentals webpage. Please continue to check back to that page for updates.   



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