Metropolitan Commuter Transportation Mobility Tax (MCTMT):
Recent changes and their effects on Freelancers
The Metropolitan Commuter Transportation Mobility Tax ("MCTMT"), commonly known as the MTA payroll tax, is a tax imposed on self-employed ("S/E") individuals (including partners in partnerships and members of LLC's that are treated as partnerships) engaging in business within the Metropolitan Commuter Transportation District ("MCTD"). The MCTD includes all boroughs of New York City along with the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.
As per recently amended NYS legislature, beginning on or after January 1, 2012, you are not subject to the MCTMT if your net earnings from self-employment allocated to the MCTD are $50,000 or less for the tax year. Please note that you are still required to file your annual MCTMT return for tax year 2011 if your net S/E earnings exceeded $10,000 in 2011.
The MCTMT rate for S/E individuals remains at .34%. Individuals who are subject to the MCTMT must file their form MTA-6 for tax year 2011 by April 30, 2012.
For tax year 2011 S/E individuals were required to make quarterly estimated payments which are due on May 2, August 1, October 31, 2011 and January 31, 2012. These estimated payments cannot be combined with NYS estimated income tax payments. They can be made using Form MTA-5 or online at http://www.tax.ny.gov/bus/mctmt/webmta5.htm. There are safe harbor rules that allow individuals to avoid underpayment of estimate penalties and interest. Please consult your tax advisor regarding these rules.