Hot topics at DOR: July - December 2018

Follow news on DOR issues that may impact more than one taxpayer. We describe the issue and will provide updates on the progress until it’s resolved.

Table of Contents

12/27/18: Massachusetts income tax rate to be reduced to 5.05% for 2019

December 27, 2018: The state income tax rate will drop in 2019 for all Massachusetts residents. The law provides that for each tax year in which certain inflation-adjusted baseline revenue growth requirements are met, the income tax rate will be reduced by increments of 0.05 percentage points until the rate reaches 5%. 

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12/19/18: Form ST-13 to be replaced by online application for small business energy exemption

December 19, 2018: In some cases, energy sales may be exempt from taxes for qualifying small businesses. For 2019 and later years, small businesses will apply online for an exemption certificate rather than submitting Form ST-13 to their energy provider. DOR has provided additional information.

12/14/18: Surcharge on vehicle rental transactions for police training in Massachusetts

December 14, 2018: As of January 1, 2019, any vehicle rental transaction in Massachusetts with a duration of more than 12 hours and not more than 30 days, must include a $2 surcharge to be collected by the vendor. DOR has provided additional information.

12/14/18: Massachusetts adopting 10 business day rule for e-filing

December 14, 2018: DOR is adopting a Federation of Tax Administrators recommendation for 2018 tax returns. Over 30 states have already implemented the change. Users of tax preparation software are now required to download and apply product updates if e-filing a return 10 or more business days after the product update release. Some software vendors have already communicated this change to customers. Check with your vendor if you have questions.

12/7/18: Information about filing HIRD forms for Professional Employer Organizations (Updated)

December 7, 2018: The Department of Revenue has extended the deadline to 1/31/19 for filing the HIRD form for 2018 to entities utilizing PEOs to file withholding taxes on their behalf. DOR has provided additional information for PEO’s seeking to assist clients with their HIRD filings.     

November 15, 2018: Professional Employer Organizations pay MA withholding taxes to DOR for multiple companies under the PEO’s Federal Tax Identification number. HIRD filings must be submitted for each company individually, much like unemployment filings for DUA. In response to several inquiries, DOR has provided additional information for PEO’s seeking to assist clients with their HIRD filings.   

11/15/18: Information about filing HIRD forms for Professional Employer Organizations

November 15, 2018: Professional Employer Organizations pay MA withholding taxes to DOR for multiple companies under the PEO’s Federal Tax Identification number. HIRD filings must be submitted for each company individually, much like unemployment filings for DUA. In response to several inquiries, DOR has provided additional informationfor PEO’s seeking to assist clients with their HIRD filings.    

11/13/18: Tax year 2017 returns must be e-filed by November 17

November 13, 2018: The IRS will temporarily shut down its Modernized e-file system for maintenance and reprogramming on November 17. That will also be the last day to e-file Massachusetts returns for tax year 2017.  

While the vast majority of individuals have already filed their tax year 2017 federal tax returns, victims of the Merrimack Valley explosions, and any federally designated disaster areas, qualify for additional accommodation. If returns cannot be filed by November 17 electronically, they should be filed on paper.

11/9/18: Filing & payment information for taxpayers affected by the Merrimack explosions (Updated)

Update November 9, 2018: Due to the ongoing recovery activities in Andover, North Andover and Lawrence, the Department will waive penalties through December 15th for any late-filed return or payment that was due on or after September 12th and before December 1st.

September 21, 2018: For taxpayers affected by the recent gas explosions in Andover, North Andover, and Lawrence, the Department recognizes that taxpayers in these areas might be unable to comply with their filing or payment due dates that occurred on or after the date of the explosions. The Department would like to assist taxpayers as much as possible. Consequently, the Department will waive any penalties associated with any late-filed return or payment that was due on or after September 12th and before October 1st. The Department will waive penalties for one month, and will later revisit whether any further extensions should be granted. If any taxpayer in the affected areas receives a penalty for this period they should reach out to us at (617) 887-6367.

10/30/18: Multiple notifications - new health insurance reporting requirements sent to practitioners

October 30, 2018: We apologize to those of you who received multiple copies of a message concerning the new Health Insurance Responsibility Disclosure (HIRD). Our intended audience was employers registered for withholding, plus authorized third parties. When sending the notice to third party administrators, we sent them one copy to each employer that they were listed as an account administrator for, as opposed to just one notice. Going forward, we will make every effort to eliminate duplicates and send only one message. We regret any inconvenience this might have caused. 

9/21/18: Filing & payment information for taxpayers affected by the Merrimack Valley gas explosion

September 21, 2018: For taxpayers affected by the recent gas explosions in Andover, North Andover, and Lawrence, the Department recognizes that taxpayers in these areas might be unable to comply with their filing or payment due dates that occurred on or after the date of the explosions. The Department would like to assist taxpayers as much as possible. Consequently, the Department will waive any penalties associated with any late-filed return or payment that was due on or after September 12th and before October 1st. The Department will waive penalties for one month, and will later revisit whether any further extensions should be granted. If any taxpayer in the affected areas receives a penalty for this period they should reach out to us at (617) 887-6367.

7/2/18: Notice of Credit Determination and related Notices of Assessment

July 2, 2018: On June 25th the Department started issuing Notices of Credit Determination to taxpayers who did not respond to earlier Notices of Intent to Assess – Information Request. (See March 16th posting below about the NIA-Information Request.) The Notice of Credit Determination explains which credit was disallowed and how much credit was disallowed. Taxpayers will also receive a Notice of Assessment reflecting a $0 amount due.

If a taxpayer has a balance due on their account after the disallowed credit, they will receive a second Notice of Assessment reflecting their actual outstanding liability. Inserted with this second NOA will be a special notice from DOR explaining that the balance due of $0 on the first NOA was incorrect. Note that the correct balance due is also visible on MassTaxConnect.

Going forward, taxpayers who are sent a Notice of Credit Determination will only receive a Notice of Assessment if there is an actual outstanding liability. The Notices of Assessment reflecting a $0 amount due will not be issued. 

Note: Taxpayers who had credits disallowed, but now have the information requested in the Notice of Intent to Assess – Information Request should respond as directed in that notice. It is not necessary to file a dispute. Remember that responses to NIA-Information Requests dated on or after 2/2/18 can be uploaded through MassTaxConnect which will help speed up processing time.

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