Massachusetts Withholding Tables Will Not Be Updated to Reflect Millionaire Tax

Effective January 1, 2023, there is a 4% surtax on Massachusetts taxable income over $1 million that was passed by voters last year. The Massachusetts Department of Revenue (MDOR) announced that it does not intend to update the withholding tables to reflect the surtax.

However, the MDOR instructs employers to use "best efforts" to account for the surtax when determining withholding. The MDOR will not take the surtax into account in determining whether an employer withheld sufficient tax to avoid penalties for withholding tax returns and payments due on or before January 31, 2024 [MDOR, Hot Topics for Tax Professionals, 1-10-23].

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Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.