2011 Tax law changes and how it effects you and your business.

I remember a few years back asking our controller what this Metropolitan Commuter transportation mobility tax was that we were paying.

IRS defines it as:

The metropolitan commuter transportation mobility tax (MCTMT) is a tax imposed on certain employers and self-employed individuals engaging in business within the metropolitan commuter transportation district (MCTD). This department administers the tax for the Metropolitan Transportation Authority. (The MCTD includes the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.)

The Metropolitan Commuter Transportation Mobility Tax (Payroll Tax) is $.34 cents per $100 of income. It was imposed on payrolls of more than $2,500; and self-employed earnings of more than $10,000. It is retroactively effective March 1, 2009. It raised approximately  $1.021 Billion in 2009, and $1.54 Billion in 2010.

But now there is a small break if you qualify. The new MCTMT tax applies to only employer’s with payroll in excess of $312,500.00 in any calendar quarter, in lieu of the $2,500.00. This excludes any educational institutions (public schools District, public elementary and secondary schools and nonpublic elementary and secondary schools. They have now imposed graduated rates ranging from .11% to .34% instead of the flat 34%.This could mean a reduction on your company’s payroll tax depending on your quarterly payroll.

Here is a chart of the breakdown

Wages

Rate

$0-$312,500

0%

$312,500.-$375,000

0.11%

$375,000-$437,000

0.23%

$437,500+

0.32%

 

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