What is MCTMT?

The Metropolitan Commuter Transportation Mobility Tax (MCTMT) is a New York state specific tax that is collected by the New York State Tax Department for the Metropolitan Transportation Authority. This tax is charged to certain employers and self-employed individual engaging in business within the metropolitan commuter transportation district (MCTD).

The MCTD is made up of 12 counties that benefits from the MTA’s services. The specific counties that are part of the MCTD are: New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester. If you're headquartered in any of these counties or have employees who work out of an office there, you might be subject to MCTMT.

When does the tax apply?

Companies are required to pay MCTMT if the sum of their payroll expense for all employees in the MCTD exceeds $312,500 for that calendar quarter. If you’ve paid more than $312,500 in salary expenses in one quarter to employees based in these 12 NY counties, then you will be subject to MCTMT.

This tax is calculated quarterly. This means that an employer whose payroll expense for a quarter does not exceed $312,500 is not subject to the MCTMT for that quarter, even if the employer’s payroll expense may have been more than $312,500 in a previous quarter.

The MCTMT rate is directly dependent on the payroll expense. This is how it breaks down as of April 1, 2012:

Payroll Expense

MCTMT Rate

Over $312,500 but not over $375,000

.11% (.0011)

Over $375,000 but not over $437,500

.23% (.0023)

Over $437,500

.34% (.0034) 

 

MCTMT is due on the last day of the following month after the calendar quarter ends. Below are the quarter break downs

Quarter

File and 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 (following year)

If you are not subject to the MCTMT for a quarter ,you are not required to file a quarterly MCTMT return for that quarter. However, if you become subject to the MCTMT in a subsequent quarter, you must file a quarterly return and pay the tax due.

How to file and pay

If you’re currently a Justworks users, we keep track of whether you owe MCTMT. If you do, we’ll invoice you for the necessary amount and file form MTA-305 on your behalf.

Otherwise, it is up to you to keep track of whether you’ve met the $312,500 threshold and file form MTA-305, Employer's Quarterly Metropolitan Commuter Transportation Mobility Tax Return and pay directly from your bank account or via check. You can file this form online or by mail and you can find more information about it here.

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.

Employee contribution is prohibited

The employer cannot deduct any portion of MCTMT that the employer is required to pay from the wages or compensation of an employee.

Exemption from MCTMT

The tax does not apply to you if you are:

  1. an agency or instrumentality of the United States;
  2. the United Nations;
  3. an interstate agency or public corporation created pursuant to an agreement or compact with another state or Canada;
  4. a federally chartered credit union;
  5. a household employer on wages paid to household employees; or
  6. any eligible educational institution.

For more exemptions, visit the New York State Tax Department site section on the MCTMT. If you’re really, truly interested in understanding this tax, we recommend checking out this 40 page guide to the MCTMT.

Our commitment to fee transparency

Part of Justworks’ service is to bill and remit payment for all federal, state and local government fees for your company and all your employees - regardless of where they reside. As part of this service we promise that:

  1. We will never mark up any fees or costs from federal, state or local governments or any third parties.
  2. We will charge fees  as soon as we know about them.
  3. All fees will be viewable on your invoice history, with a label or explanation.
  4. These fees are not related to Justworks and are applicable to all businesses.
  5. You can always reach out to us at 1-888-534-1711 or support@justworks.com to ask any questions regarding your invoice.

Disclaimer

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.

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