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Understanding the Metropolitan Commuter Transportation Mobility Tax, or MCTMT

Posted April 24, 2017 by Justworks in Benefits and Perks
The Metropolitan Commuter Transportation Mobility Tax (MCTMT), otherwise known as the MTA Tax, is a payroll tax in certain New York areas.

The Metropolitan Commuter Transportation Mobility Tax (MCTMT) is a tax imposed on certain employers and self-employed individuals doing business within the metropolitan commuter transportation district (MCTD).

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

The tax has colloquially been given the name “the MTA Tax” because the money is used for the MTA department and only the counties that benefit from the infrastructure—railroads, ferries, bridges, tunnels, subways, etc.—are included in contribution.

Psst...Justworks processes payroll and related payroll taxes, so we can calculate how much MCTMT you’ll pay each quarter. Learn more about it here.

Who Has to Pay the MCTMT?

According to the New York Department of Taxation and Finance, employers must file a quarterly return and pay any MCTMT due for a calendar quarter if:

  • They’re required to withhold New York State income tax from wages; and
  • Their payroll expense exceeds $312,500 for that calendar quarter.

This tax does not apply to public school districts, agencies or instrumentalities of the U.S., federally chartered credit unions, and several other types of institutions. You can read the full list here.

How is the MCTMT Calculated?

This MCTMT is assessed based on the employer’s total payroll expense that an employer has or a certain amount of net income that a self-employed individual generates. The maximum MCTMT rate is 0.34%. The tax rate scale is based on how much payroll the employer pays for covered employees each calendar quarter. The rates are as follows:

  • Over $312,500 - $375,000: 0.11% tax
  • Over $375,000 - $437,500: 0.23% tax
  • Over $437,500: 0.34% tax

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Self-Employed and the MCTMT

The amount of net earnings that needs to be reached before the tax kicks in is $50,000. Self-employed individuals (including partners) do not share in the same scaled tax rates as employers do. They are required to pay a flat 0.34% of their total net earnings once they meet the $50,000 threshold.

How and When to File and Pay the MCTMT

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.

Employers that are not required and do not elect to participate in the PrompTax program can file a paper Form MTA-305 and pay the MCTMT by check or money order. Alternatively, if the employers can create an Online Services business account, they can seamlessly file and pay the MCTMT online through the Tax Department Web site.

Quarterly returns are due 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

When the due date falls on a Saturday, Sunday, or legal holiday, employers may file on the next business day.

Justworks Can Help

The MCTMT is based on your payroll. Justworks processes payroll and related payroll taxes, so we can calculate exactly how much MCTMT you’ll have to pay New York each quarter. As with everything at Justworks, this saves you time so that you can focus on what really matters: running your business.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.