File a Protective Claim for New York State MCTMT by April 30, 2013

If you are a self-employed individual, and timely filed the annual Metropolitan Commuter Transportation Mobility Tax Return, MTA-6 for tax year 2009, the deadline to file a protective claim is quickly approaching.  That date is April 30, 2013.  You only have to file a protective claim once.  It will apply to all open and all future periods. 

If you are an employer, and filed the MCTMT quarterly return MTA-305, and have not filed a protective claim for previous quarters, you also have the deadline of April 30, 2013, to file a protective claim for the quarter Jan. - March 2010.  As with self-employed annual filers, the claim will apply to all open and all future periods. 

You are advised to file a protective claim, because the constitutionality of the Metropolitan Commuter Transportation Mobility Tax has been challenged.  It is very easy to do so. 
Just click on the link Protective Claim to get started.

 

First, let me make it clear that until this issue is resolved in the courts, the MCTMT is still in effect and must continue to be filed. 

Responsibility of employers: 

The MCTMT on employers is determined on a quarterly basis. If wages subject to withholding for covered employees exceeds $312,000 for a quarter, MCTMT is due for that quarter.  Employers file form MTA-305.  If in a following quarter, covered employee wages does not exceed $312,000 MCTMT is not due for that quarter.  

Covered employees are those whose predominant responsibilities, base of operations or direction and control is in the Metropolitan Commuter Transportation District (MCTD).  If any of these are not conclusive, then the employees’ residence should be used.


 The (MCTD) includes the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Nassau, Suffolk, Westchester, Orange, Rockland, Putnam and Dutchess. 

Quarterly MCTMT returns must be filed and any MCTMT due must be paid for each calendar quarter by the last day of the month following the end of the quarter as follows:

Quarter                                                          Due Date

 January 1 to March 31                                    April 30

April 1 to June 30                                            July 31

July 1 to September 30                                   October 31

October 1 to December 31                             January 31 

MCTMT payments – The method and due dates for remitting MCTMT payments depend on whether or not the employer is required to or elects to participate in the PrompTax program for New York State withholding tax purposes. 

Responsibility of Self-Employed Individuals (including partners in partnerships and members of LLCs that are treated as partnerships for federal income tax purposes):

If you are a self-employed individual (as defined above) with net earnings from self-employment allocated to the MCTD in excess of $50,000 you are subject to the tax (MCTMT). 

Net earnings from self-employment is generally the amount computed on federal Form 1040, Schedule SE, Section A, line 4 or Section B, line 6 depending on which section you are required to complete. 1

 

If you have net earnings from self-employment allocated to the MCTD from more than one business or partnership, you must use the total of all your net earnings from self-employment allocated to the MCTD for purposes of the $50,000 threshold and to compute the tax.  

 

Please note that this $50,000 threshold is an allocated number.  That is total net income allocated to the MCTD by use of allocation methods according to NYS Personal Income Tax rules (Not NYS Corporation Tax rules). 

Annual MCTMT returns (MTA-6) for self-employed individuals is due on or before the 30th day of the fourth month following the close of the tax year (for calendar-year filers, this will be April 30 of the following tax year).  

Individuals who will owe any MCTMT for the tax year must make estimated MCTMT payments. The estimated tax payments are due quarterly. 

Quarter                                                          Due Date

 

January 1 to March 31                                     April 30

April 1 to June 30                                             July 31

July 1 to September 30                                   October 31


October 1 to December 31                             January 31 

All MCTMT filings and payments may be web filed through the Tax Department website or paper filed with check remitted.
 

 

According to the NYS Department of Taxation and Finance website:

 

The constitutionality of the MCTMT has been challenged in a series of lawsuits. In all but one of these lawsuits in which there has been a decision, the MCTMT has been ruled to be constitutional and the legal challenges have been dismissed. In just one of the challenges, a Nassau County Supreme Court justice recently found the MCTMT to be unconstitutionally enacted, which determination is being appealed by the State of New York and the MTA. The litigation is not concluded and the tax is still in effect. If this requirement to pay the tax and file returns were to change, the department will notify taxpayers. 

All taxpayers who have been paying this tax remain subject to the tax and are required to continue to pay the tax and file the required returns. As with other taxes, failure to make the tax payments and file required returns could subject a taxpayer to penalties. 

For more detailed information on the requirements for the MCTMT, see NYS Publication 420 – Guide to the Metropolitan Commuter Transportation Mobility Tax. 

For a free phone consultation, call Brian Gordon, CPA at 516-510-6041.

Brian Gordon, CPA, is a state and local tax consultant in private practice. Previously, he was with the NYSDTF for more than 30 years, most recently as a District Audit Manager in Manhattan and Brooklyn. He is a member of the NYSSCPA New York, Multistate & Local Taxation Committee and writes and speaks on various tax issues. He can be reached at bgord520@gmail.com or (516-510-6041).   
He also posts a monthly blog called Brian Gordon's STATEments at http://gordonstate.blogspot.com.

 

1: www.tax.ny.gov