Massachusetts employer tax information
About Massachusetts employer tax information
With Square, you can run payroll, pay your taxes and stay ahead of the compliance to focus on running your business. This guide is intended for your state taxes only. It’s important to note that laws vary by jurisdiction, and this guide does not attempt to address all jurisdictions or federal taxes — for example, counties or cities often have requirements that differ from federal and state law.
Before you begin
To sign up for Square Payroll in Massachusetts, you must be registered with the Massachusetts Department of Revenue (DOR) and Massachusetts Department of Unemployment Assistance (DUA) so we can pay and file your state taxes.
For Massachusetts Department of Revenue (DOR), you need your:
Massachusetts Withholding Account Number (11 digits)
Massachusetts Deposit Frequency: (Depository [or weekly], monthly, quarterly, or annually)
For Massachusetts Department of Unemployment Assistance (DUA), you need your:
Massachusetts Employer Account Number (8 digits)
Massachusetts Contribution Rate
Massachusetts Employer Medical Assistance Contribution (EMAC) Rate
Massachusetts Covid-19 Recovery Assessment
The Massachusetts Department of Unemployment Assistance typically requires employers to file and pay unemployment taxes starting in the quarter that wages are first paid. If you become liable for unemployment taxes and register an account in a later quarter, it may be necessary to file these taxes retroactively. Visit the Massachusetts website or contact the MA Department of Unemployment Assistance directly to determine your requirements and ensure any outstanding tax filings are completed promptly to avoid penalties.
Massachusetts payroll tax details
Square Payroll processes the following per the frequency for the listed state agencies.
Massachusetts Department of Revenue (DOR)
Withholding Tax Payment: processes after every pay run
Employer’s Return of Income Taxes Withheld (M-941): processes monthly, quarterly, or annually
Wage and Tax Statement (W-2): processes annually
New Hire Report: processes as needed
Massachusetts Department of Unemployment Assistance (DUA)
Unemployment Insurance Payment: processes quarterly
Employment and Wage Detail Report: processes quarterly
Massachusetts Department of Family and Medical Leave
Paid Family & Medical Leave Return: processes quarterly
Register as a new employer in Massachusetts
Register online with MassTaxConnect as a new business. You will receive your Withholding Account Number and Deposit Frequency immediately after completing the registration online.
Register on Unemployment Services for Employers portal as a new business. You will receive your Employer Account Number immediately after completing the registration online.
Log in to your Unemployment Services for Employers account to find your rate. If you are unsure of your rate, contact the agency at 617-626-5075 or visit the MA Department of Unemployment Assistance website.
Most new employers are exempt from Employer Medical Assistance Contributions for two years. Log in to your Unemployment Services for Employers account to find your rate. If you’re unsure, contact the agency at 617-626-5075 or visit the MA Department of Unemployment Assistance website.
The Covid-19 Recovery Assessment rate is assigned to employers based on the business’ UI contribution rate. Log in to your Unemployment Services for Employers account to find your rate. If you are unsure of your rate, contact the agency at 617-626-5075 or visit the MA Department of Unemployment Assistance website.
Find your Massachusetts tax ID numbers and rates
You can find these on MassTaxConnect or on any previous correspondence from the MA Department of Revenue. If you’re unsure, contact the agency at 617-887-6367.
Look this up through your Unemployment Services for Employers portal or on previous Rate Notices received from the agency. If you’re unsure, contact the agency at 617-626-5075 or visit the MA Department of Unemployment Assistance website.
Look this up through your Unemployment Services for Employers portal or on the Rate Notice mailed by the MA Department of Unemployment Assistance each year. If you’re unsure, contact the agency at 617-626-5075 or visit the MA Department of Unemployment Assistance website.
Most employers are exempt from Employer Medical Assistance Contributions for two years. After that, employers are assigned a rate based on the number of years they have been in business. If you are liable, you can look up your rate Unemployment Services for Employers portal or on the Rate Notice mailed by the MA Department of Unemployment Assistance each year.
If you’re unsure, contact the agency at 617-626-5075 or visit the MA Department of Unemployment Assistance website.
The Covid-19 Recovery Assessment rate is assigned to employers based on the business’ UI contribution rate. Look this up through your Unemployment Services for Employers account to find your rate or on the most recent Rate Notice you received from the agency. If you are unsure of your rate, contact the agency at 617-626-5075 or visit the MA Department of Unemployment Assistance website.
Authorize Square Payroll to file and pay unemployment insurance taxes on your behalf
To file and pay your Massachusetts unemployment insurance taxes, you need to authorize Square Payroll as your third-party administrator (TPA).
- Sign in to your Unemployment Services for Employers account and select Additional Services > Manage Third-Party Administrator Access.
- Select Add Third-Party Administrator > Next.
- In the Agent ID field, enter the Square’ TPA ID: 105349 then select Next.
- Select File wage reports and make payments.
- We do not need access to perform benefit charges, protest or wage and separation mailing. Select No.
- Select Next > Submit.
- Sign in to your Unemployment Services for Employers account and select Action Center to view the request.
- If Square Payroll requested TPA access from you, select Click here to respond to a third party access request.
- Review the third-party access request. It should show:
- Third-party name: Square Payroll Inc.
- Third-party ID: 105349
- Third-party email: squarepayroll@squareup.com
- Select Yes > Next.
- Select File wage reports and pay. This is the only role we need access to.
- Select Next > Submit.
If you have any additional questions or issues, contact the MA Department of Unemployment Assistance at 617-626-5050.
Massachusetts Paid Family and Medical Leave Program
Massachusetts requires non-exempt employers to withhold and pay premiums to the Paid Family and Medical Leave program. The Massachusetts Paid Family and Medical Leave program (PFML) is funded through premiums paid by covered individuals and employers in the form of paycheck withholdings and is administered by the Massachusetts Department of Family and Medical Leave. Learn more about the Massachusetts Paid Family and Medical Leave program.
The mission of the plan is to provide paid, job-protected leave to covered individuals beginning January 1, 2021. Covered individuals include W-2 employees and 1099-NEC contractors who meet the criteria defined by the PFML law.
Covered individuals include most MA W-2 employees and MA 1099-NEC contractors if they are not defined as independent contractors and if they make up over 50% of the total workforce. Learn more about who in your workforce does the PFML law cover.
If you had 25 or more covered individuals in your workforce for the previous year, then you are required to make employer contributions of 0.312% for covered individuals in the current year. If you had less than 25 covered individuals in last year’s workforce, you do not need to make an employer contribution this year. Learn more about Paid Family and Medical Leave employer contribution rates.
Employers and workers in the state of Massachusetts are required to participate in the PFML program with a few exceptions. To determine if your business, W-2 employee, or 1099-NEC contractor is exempt from the PFML program, visit the Paid Family and Medical Leave website.
If you are only paying contractors thru Square Payroll, we are unable to remit payments and complete the PFML tax filings on your behalf at this time.
Square Payroll supports MA Paid Family and Medical Leave premium calculations, withholdings, payments, and reporting with a few exceptions.
Covered W-2 employees’ premiums of 0.318% will be withheld from the employee’s paychecks and withholdings will be reported on their W-2s. Any premiums that were not withheld from the employee’s paychecks through Square Payroll, will be collected from the employer and the employer will need to collect the premiums from the employee.
Covered contractors’ premiums of 0.318% will be withheld from the employer, and the tax will not be reported on the Form 1099-NEC.
Square Payroll does not offer the option for employers to cover the W-2 employee’s portion of the MA PFML tax. If you are only paying contractors thru Square Payroll, we are unable to collect premiums, remit payments and complete the MA PFML filing at this time.
For Square Payroll to file and pay this tax on your behalf, you must have a PFML account registered with the same FEIN (Federal Employer Identification Number) that is on your Square Payroll account. If you are a sole proprietor, you can also register under your SSN. If you are not registered with either of those numbers, Square will not be able to file on your behalf.
To register your MA PFML account with your FEIN:
- Sign in to your MassTaxConnect.
- For I Want To, select A__dd an account type/new location/new license__.
- Select Paid Family and Medical Leave > Next.
- Fill out the registration form and complete the remaining steps. You will receive a confirmation number when done.
Employers with fewer than 25 covered individuals are not required to pay the employer portion of the premium. Your workforce size is based on the average number of covered individuals from the previous calendar year (Jan. 1 – Dec. 31). To calculate your workforce, use the PFML Contribution Calculator.
If your business is exempt from the program or you employ 25 or more covered individuals, update your business settings in your Square Dashboard. To do so:
- Sign in to your Square Dashboard and go to Staff & payroll > Settings.
- Select Tax Info and select Edit for your Massachusetts state tax account information to update the Massachusetts Paid Family and Medical Leave rates or exemptions on your account. Choose one of the options:
- Employer is exempt: select if you employ less than 25 covered individuals.
- Employer is not exempt: select if you employ 25 or more covered individuals or you volunteer to opt in to contribute the employer tax.
- Business is exempt: select this if your business is not required to participate in the PFML program.
- Add a future effective date and select Save.
To mark an employee exempt from the program:
- Sign in to your Square Dashboard and go to Staff & payroll > Team.
- Select an employee to exempt.
- Under their Tax Settings, select This employee is exempt from The Massachusetts Paid Family and Medical Leave Program.
Changes will be effective immediately and applicable to the current quarter.
1099-NEC contractors are exempt unless they make up more than 50% of your covered workforce. To mark a 1099-NEC contractor exempt from the program:
- Sign in to your Square Dashboard and go to Staff & payroll > Team.
- Select a contractor to exempt.
- For Employment Type, select Exempt from Massachusetts Paid Family and Medical Leave Program.
Changes will be effective immediately and applicable to the current quarter. For additional information about the MA PFML, reference the Department of Family and Medical Leave’s website or the Employer’s guide.
Make Massachusetts payroll tax payments
To make a Massachusetts income tax payment, you must be registered as a business with the Massachusetts Department of Revenue MassTaxConnect.
- Sign in to your MassTaxConnect account to pay online.
- From Accounts, select Account for withholding tax.
- Select the Period for the desired period.
- Select whether you want to pay by EFT debit or credit card.
For additional information, contact the Massachusetts Department of Revenue at 617-887-6367.
To make Massachusetts Unemployment Insurance payments, you must be registered with the Massachusetts Department of Unemployment Assistance UI Online website. This registration process will determine if you are subject to Unemployment Insurance Contributions.
Once registered, activate your Massachusetts UI account by entering your Employer Account Number (EAN) and the Activation Password you received. If you need to access your account prior to receiving your permanent login credentials, you may use the login information from your activation letter for the next 30 days.
Sign in to your Unemployment Services for Employers Portal and select Payment Information to make a payment.
For questions regarding Massachusetts Unemployment Insurance payments, contact the Massachusetts Department of Unemployment Assistance at 617-626-5075.
Make payroll withholding tax filings
For employers filing on a monthly basis, both the return and payment are due on or before the 15th day of the month following the monthly withholding period (except for March, June, September, and December) then due the last day of the month following the withholding period. A return must be filed even if no tax is due. Any return indicating $0 tax due must be eFiled online through DOR’s MassTaxConnect application.
To file online:
- Go to the MassTaxConnect homepage.
- Select Register a new taxpayer, select the appropriate link for your tax situation and follow the links through the registration.
To file by mail, make check or money order payable to the Commonwealth of Massachusetts and mail your return and payment to:
Massachusetts Department of Revenue
PO Box 419255
Boston, MA 02241-9255.
Quarterly withholding tax returns are due by the last day of the month following the end of the calendar quarter (for example, on April 30 for the first quarter). A return must be filed even if no tax is due. Any return indicating $0 tax due must be eFiled through DOR’s MassTaxConnect application.
To file:
- Go to the MassTaxConnect homepage.
- Select the Paid Family and Medical Leave withholding account.
- Select File Return and follow the steps to complete filing.
W-2s are due by January 31 for the preceding calendar year. When filing Form M-941, Employer’s Return of Income Taxes Withheld, you must also file W-2s for all employees working in Massachusetts.
- To file online, use the MassTaxConnect of the DOR website.
- To file by mail, mail form W-2 to
Massachusetts Department of Revenue, Forms W-2
PO Box 7015
Boston, MA 02204
For questions about withholding tax payments, contact the Massachusetts Department of Revenue Contact Center at 617-887-6367.
Make unemployment insurance tax filings in Massachusetts
Unemployment insurance tax reports and payments are due by the last day of the month following the end of the calendar quarter (for example, on April 30 for the first quarter).
- To file online, use the State of Massachusetts Department of Unemployment Assistance Unemployment Insurance (UI) website. Employers who pay wages within Massachusetts are required to register with and report quarterly wage data to this agency.
For more information on how to file by mail, visit the Unemployment Insurance (UI) for Employers website.
You must file quarterly returns even if no contributions are due. As long as you have an active unemployment insurance account, you must file reports every quarter by the due date. If you are liable for unemployment insurance taxes for any part of a calendar year, you are liable for the entire year and must file quarterly reports for the entire year.
If you believe your business no longer meets the qualifications for unemployment insurance tax, you must notify the Massachusetts Department of Unemployment Assistance. In such cases, you must continue to file quarterly contribution and wage reports until you are notified that your account has been made inactive. You will be subject to a penalty if you fail to file.
For more information on state unemployment taxes, contact Massachusetts Department of Unemployment Assistance (DUA) at 617-626-5075 or visit the Massachusetts Department of Unemployment Assistance website.
Amend duplicate tax filings in Massachusetts
The Massachusetts Department of Revenue (DOR) allows you to correct any misreported payroll on your Form M-941 by submitting Form M-941, Amended Return of Income Taxes Withheld. Here are some general guidelines for completing your adjusted return:
- Download Form M-941-A, Amended Return of Income Taxes Withheld or log into the MassTaxConnect website to file electronically.
- Obtain a copy of the Form M-941 that was filed by your previous payroll provider - this is needed to complete the “Original Amount Reported” section of the amendment.
- Use the information from Square’s Form M-941 tax summary to fill out your amended return.
- You do not need to include a payment; Square paid the applicable taxes for this quarter.
File your Form M-941-AM with the DOR as soon as possible to avoid unnecessary penalties or fees from underreporting your wages and taxes. If you have any questions on filing your amendment, contact the Massachusetts Department of Revenue at 617-887-6367 or visit the Massachusetts Department of Revenue website.