Hot Topics for Tax Filing Season

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.

Filing & payment information for taxpayers affected by the Merrimack Valley gas explosions

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

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.

Personal Income Tax Payments Submitted by Paper Check at the Deadline

April 23, 2018: Although many taxpayers are anticipating refunds from Personal Income Tax returns filed at the tax deadline, others may be waiting for their check to be cashed. Since April 9th, over 200,000 Personal Income Tax checks have been delivered to the Department of Revenue, and timely payments (postmarked by April 18th) are still arriving from the Post Office. And that doesn’t include all of the 1st quarter 2018 estimated tax payments which go directly to the bank for processing. Before April 9th, most checks were being cashed within a day or two but it will take us more than a few days to open 200,000 plus envelopes and process the enclosed payments. If your check hasn’t been cashed by May 7th, give us a call and based on your specific situation, we’ll be able to advise you what to do next. Keep in mind that any mail sent with a return receipt requested takes longer to be delivered from the Post Office to DOR and any check that is not signed, is incorrectly made out or does not have the appropriate document with it (a tax return or a Form PV, Income Tax Payment Voucher) will also be delayed. 

Final thought – next year, send your payment a little bit earlier to avoid the last minute crunch or even better, pay electronically. Whether making a payment through our MassTaxConnect system or with your electronically filed tax return, you can schedule the withdrawal date that works best for you.

Penalties ahead for some non-resident composite (Form MA NRCR) filers

March 29, 2018: Non-resident composite filers are required to file Form MA NRCR and to make all payments electronically. Some non-resident composite filers are incorrectly sending payments to DOR by paper check with various personal income tax documents including Form PV and Form 1-ES. Non-resident composite payments submitted with personal income tax documents may not be applied to your account correctly or in a timely manner and may result in penalties for failing to pay electronically. The penalty for failing to pay electronically when required to do so is $100 per payment. See TIR 16-9 for all electronic filing requirements.

Note that Form MA NRCR and all payment types for non-resident composite filers may be submitted through MassTaxConnect. Log on to MassTaxConnect or check with your software vendor about additional electronic filing and payment options that may be available.

Notice of Change in Tax Return

March 19, 2018: DOR has become aware that a small number of Notices of Change in Tax Return have been issued reporting incorrect changes to lines 5, 6 or 23 on Form 1 (resident returns) or to line 27 on Form 1-NR/PY (non-resident/part-year resident returns). This issue involves paper returns only. Not all changes to those line numbers are incorrect but if you believe you may have received an incorrect notice, please contact us at (617) 887-6367 or (800) 392-6089. We apologize for any inconvenience this may cause.

What is a Notice of Intent to Assess - Information Request?

March 16, 2018:  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. 

New this year is an option to respond to the notice online through MassTaxConnect, no account required. So far, more than 70% of taxpayers responding to this notice are uploading their information using a phone or computer. Whether sent by mail or through MassTaxConnect, it’s important to include page 2 of the notice with the response so we can match the information to the account as quickly as possible. 

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

Form changes for Non-profit taxpayers filing Form 3M, Form M-990T-62 or M-990T

March 12, 2018:  Filers of Form 3M, Form M-990T-62  or Form M-990T are able to file returns and make any type of payment electronically through MassTaxConnect but if making payments by paper check,  Form 3M and Form M-990T-62 filers should no longer use Form 2-ES to make estimated tax payments or Form M-8736 for extensions.   These forms are now for fiduciary filers only.  See below for more about what forms non-profit taxpayers must use this year.     

Estimated tax payments: If making an estimated tax payment by paper check,  all non-profit taxpayers should use the new Form UBI-ES.

  • M-990T calendar year filers must make their first installment by March 15th;
  • M-990T-62 and 3M calendar year filers must make their first installment by April 17th this year.

Extension payments:   If making an extension payment by paper check, all non-profit taxpayers should use Form M990T-7004. 

  • Extension payments  must be made on or before the due date of the return which is April 17th this year for calendar year filers;
  • M-990T filers are eligible for an automatic 8 month extension if they have paid 50% of tax due;
  • M-990T-62 and 3M filers are eligible for 6 months if they have paid 80% of the tax due;
  • Similar to corporate excise and personal income tax, if no payment is due then no filing is required for an automatic extension.

Electronic filing requirements: 

  • Filers of Form M-990T and M-990T-62 may be subject to an electronic filing requirement – see TIR 16-9
  • Filers of Form 3M are not subject to any electronic filing requirements.  Note: if you file Form 3M and you have been penalized for failing to file or pay electronically, please contact the Office of the Taxpayer Advocate.

 

Refunds Changed from Direct Deposit to Paper Check

February 26, 2018: DOR has just released a number of income tax refunds via paper check where direct deposit had been requested on the tax returns. DOR sometimes changes the refund delivery method from direct deposit to paper check as an additional security measure and this action was taken in an effort to honor these early refund requests more quickly. We apologize for any inconvenience this may cause.

Changes in 1099-K requirements

February 15, 2018: There are new reporting requirements for third party settlement organizations. Beginning with the 2017 calendar year, third party settlement organizations must report, on Form 1099-K, gross amounts over $600 paid to anyone with a Massachusetts address.  

DOR has prepared answers to questions that may be asked by taxpayers who receive a 1099-K this tax filing season.

Notice of Change in Tax Return

February 6, 2018: Some taxpayers may receive a Notice of Change in Tax Return that shows adjusted payments, and a reduced refund or balance due that seems incorrect. If the notice only shows a change to payment lines and you receive the refund you requested, you can be sure that there is no problem. Refunds are generally issued within a few days of the notice. We are addressing several issues with this notice and a new version is expected to be in use for 2017 returns in mid-February. We apologize for any confusion this notice may cause until then. If the notice shows additional changes and you are unsure of the reason, please call our contact center at 617-887-6367.

Employer's State ID Number on MA W-2s

January 29, 2018: Some employers may have mistakenly used their Massachusetts withholding account ID in box 15, the Employer’s state ID number field on their W-2s. The WTH account ID is used internally by DOR and should not replace the federal EIN for this purpose. If you are using tax preparation software and you have any problems with your entry for box 15 of a MA W-2, please enter the Employer’s identification number (EIN) from box b for the Employer’s state ID number in box 15 when filing personal income tax returns. DOR will accept either number. (See sample W-2 form.)

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