What We Heard from You – Questions from Tax Practitioners

Thanks to all of you who gave us feedback on the latest tax season, or asked questions. It’s helpful for us to know what‘s on your mind and we’ll share the information with other tax professionals. If you’re asking, it’s likely that others want to know as well.

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Like I do with the IRS, can I schedule Massachusetts estimated payments for my clients through my third-party software when I file a return?

Yes. Estimated payments may be scheduled ahead of time through third-party software for corporate tax, personal income tax and fiduciary income tax at the time a tax return is filed. They may also be filed separately from the tax return filing.   Check with your vendor for more information.

My fiduciary payments are always withdrawn on the filing date.  Why can’t I have a fiduciary payment withdrawn on the due date like I can for individual taxpayers? 

You can. DOR allows scheduling (or warehousing) of tax payments for fiduciary income tax, personal income tax and corporate tax. Please check with your vendor. 

Several questions came in about the timing of check payment processing.

As was discussed in Hot Topics and DOR News, over 200,000 Personal Income Tax checks were delivered to DOR in the last couple of weeks of the filing season. Checks received before the beginning of April were generally processed within a day or two but it takes more than a few days, even up to several weeks, to open over 200,000 envelopes and process the payments. New equipment helped us process tax year 2017 payments much more quickly than in past years and enhanced barcoding on payment vouchers will provide further efficiency next year.

Naturally, if a check is not signed, completed incorrectly or is not accompanied by the appropriate document (a tax return or Form PV, or Income Tax Payment Voucher), it will cause delays. We highly recommend sending the payment as early as possible to avoid the last minute crunch. Even better – pay electronically. Withdrawal dates can be scheduled ahead through MassTaxConnect or third party software.

Amended Returns

Since the same form is now used for both original and amended tax returns, can DOR add a line for additional refund or additional amount owed?

For 2017 personal income tax returns, DOR added Line 41 to account for payments with the original return. For 2018, we are planning to add an additional line to account for refunds from the original return. An amended return will now reflect the expected refund or tax due.

Fiduciary Form Approvals

Were there any issues at DOR that would have delayed the release of the 2017 fiduciary software?

No. For 2017 returns, DOR provided draft forms and a schema to software vendors on a timely basis. In fact, we post vendor testing and approval information on the Tax Professionals page during filing season for your review. Once a vendor is approved by DOR for a particular tax type, the vendor determines the timing of the release to customers.

Additional E-file Options for Third-Party Software

Will DOR allow us to file pass-through entity withholding returns through our own third-party vendor software?

DOR often hears from practitioners that it would be helpful to have additional forms available through their third-party vendor software – Form 3M, Form M990T and M990T-62, banking and insurance forms have also been mentioned. For DOR to accept a return through third-party software, it means significant IT efforts for both DOR and your software vendor. While DOR has no immediate plans to add additional forms for this filing method, we have asked software vendors to weigh in on what forms they are most likely to support. We will continue to analyze volume and other factors that play a part in the decision to expand the system.

Form 3M

What is the filing requirement for Form 3M?  Must Form 3M be filed electronically?  What about payments for Form 3M?

The filing requirement for Form 3M is $100 of taxable income. Form 3M is not required to be filed electronically nor must payments be made electronically at this time although this is subject to change. Please refer to the current electronic filing and payment requirements on the website. Even if not required, we hope that Form 3M filers will take advantage of electronic filing and payment through MassTaxConnect. Note that e-file for Form 3M filers was addressed during the filing season in a March 12 posting on our Hot Topics web page.