Current through Register 1531, September 27, 2024
(1)
Scope of Regulation;
Background; Outline of Topics; Effective Date.
(a)
Scope of
Regulation. 830 CMR 175M.8.1 sets forth the Department's rules
applicable to the filing of PFML returns and to the administration and
collection of PFML contributions.
(b)
Background. "An
Act Relative to Minimum Wage, Paid Family Medical Leave and the Sales Tax
Holiday", St. 2018, c. 121, § 27, established the PFML program, which is
overseen by DFML. The PFML program will provide individuals on family leave or
medical leave with paid benefits funded by PFML contributions. Effective
October 1, 2019, all employers and covered business entities must remit PFML
contributions on behalf of employees and certain self-employed individuals to
the Department. St. 2018, c. 121, § 30. Self-employed individuals not
otherwise covered by PFML may elect to participate in the program and remit
PFML contributions to the Department from their self-employment income. M.G.L.
c. 175M, § 6(b). Pursuant to M.G.L. c. 175M, § 8(g), DFML has
delegated to the Commissioner the administration and collection of PFML
contributions. PFML contributions are considered taxes subject to the
administration and collection provisions of M.G.L. c. 62C, and 830 CMR
175M.8.1. Further, pursuant to M.G.L. c. 62C, § 5, the Commissioner may
prescribe the manner, format, and medium in which returns must be filed with
the Department. Accordingly, the filing of an employment and wage detail report
by an employer, covered business entity, or participating self-employed
individual through MassTaxConnect, as required by DFML, constitutes the filing
of a return for the purposes of M.G.L. c. 62C, and 830 CMR 175M.8.1.
(c)
Outline of
Topics. 830 CMR 175M.8.1 is organized as follows:
1. Scope of Regulation; Background; Outline
of Topics; Effective Date.
2.
Definitions.
3. PFML Returns and
Payments.
4. Collection.
5. Penalties and Interest.
(d)
Effective
Date. 830 CMR 175M.8.1 is effective for all PFML contributions
required to be remitted on or after October 1, 2019.
(2)
Definitions. For
the purposes of 830 CMR 175M.8.1, the following terms have the following
meanings:
Abatement. An application by an
employer, covered business entity, or participating self-employed individual
filed with the Department pursuant to M.G.L. c. 62C, § 37 that seeks to
reduce a previous assessment of tax, including PFML contributions, and/or
penalties, issued by the Commissioner.
Amended Return. A correction or
adjustment made by an employer, covered business entity, or participating
self-employed individual to a previously filed PFML return to increase or
decrease a previously self-assessed tax.
Assessment. The determination of tax
due by the Commissioner upon the issuance of a deficiency assessment or any
self-assessment of tax by an employer, covered business entity, or
participating self-employed individual.
Commissioner. The Commissioner of
Revenue or the Commissioner's duly authorized representative.
Covered Business Entity. A trade or
business as defined in M.G.L. c. 175M, § 1 that contracts with
self-employed individuals for services and is required to report the payment
for services to such individuals on IRS Form 1099-MISC for more than 50% of its
workforce. Covered business entities are required to remit PFML contributions
to the Department.
Department. The Massachusetts
Department of Revenue.
Department of Family and Medical Leave or
DFML. The Department of Family and Medical Leave authorized to
oversee the PFML program pursuant to M.G.L. c. 175M, § 8.
Employer. An employer required to
remit PFML contributions under M.G.L. c. 175M.
Paid Family and Medical Leave or PFML.
The Massachusetts Paid Family and Medical Leave program established under
M.G.L. c. 175M.
Participating Self-employed
Individual. A self-employed individual, as defined in M.G.L. c.
175M, § 1, who has elected coverage under the PFML program pursuant to
M.G.L. c. 175M, § 2(j).
PFML Contributions. The payment
required to be remitted by employers, covered business entities, and
participating self-employed individuals pursuant to M.G.L. c. 175M, §
6.
PFML Return. A return filed by an
employer, covered business entity, or participating self-employed individual
reporting PFML contributions properly completed and filed in the manner
prescribed by the Commissioner. For the purposes of 830 CMR 175M.8.1, the
employment and wage detail report DFML requires to be filed by employers,
covered business entities, and participating self-employed individuals when
remitting PFML contributions to the Department is considered a return filed
under and subject to M.G.L. c. 62C.
(3)
PFML Returns and
Payments. PFML contributions are considered to be taxes for
purposes of M.G.L. c. 62C and 830 CMR 175M.8.1. As such, the following explain
the rights and obligations of employers, covered business entities, and
participating self-employed individuals with respect to their PFML returns.
(a)
Returns and
Payments. DFML requires employers, covered business entities, and
participating self-employed individuals to file a PFML return through
MassTaxConnect when remitting contributions to the Department.
458 CMR
2.04(2). Employers, covered
business entities, and participating self-employed individuals must file a PFML
return and remit PFML contributions through MassTaxConnect on or before the
last day of the month following the close of the previous calendar
quarter.
(b)
Self-assessment. The filing of a PFML return shall be
considered a self-assessment of tax pursuant to M.G.L. c. 62C, § 26(a),
with any PFML contribution deemed to be self-assessed at the amount shown as
due on the return or at the amount properly due, whichever is less, and at the
time when the PFML return is filed or required to be filed, whichever occurs
later.
(c)
Deficiency
Assessment. If the Commissioner determines that the full amount of
the PFML contribution due from an employer, covered business entity, or
participating self-employed individual has not been assessed or deemed to be
assessed, the Commissioner may assess the full amount of the PFML contribution
pursuant to M.G.L. c. 62C, § 26(b) and M.G.L. c. 175M, §
8(g).
(d)
Amended
Returns. An employer, covered business entity, or participating
self-employed individual may adjust the self-assessed PFML contribution on a
previously filed PFML return by filing an amended return in accordance with the
procedures outlined in
830 CMR 62C.26.2:
Amended Returns.
(e)
Abatements. An
employer, covered business entity, or participating self-employed individual
may seek an abatement of PFML contributions assessed by the Commissioner in
accordance with the procedures set forth in M.G.L. c. 62C, § 37, and
830 CMR 62C.37.1:
Abatements. The filing of a PFML return through MassTaxConnect
on or before filing an application for abatement satisfies the prerequisite for
abatement required under M.G.L. c. 62C, § 38.
(4)
Collections. As
provided by M.G.L. c. 175M, § 8(g), all provisions of M.G.L. c. 62C
authorizing the Commissioner to collect any tax due are applicable to any PFML
contributions due from an employer, covered business entity, or participating
self-employed individual, subject to any period of limitations established by
M.G.L. c. 62C. A tax lien in favor of the Commonwealth shall arise in
connection with unpaid PFML contributions at the time of the assessment thereof
as provided in M.G.L. c. 62C, § 50.
(5)
Penalties and
Interest.
(a)
Penalties. An employer, covered business entity, or
participating self-employed individual that fail to file a PFML return, file a
PFML return timely, or pay the PFML contributions may be subject to penalties
under M.G.L. c. 62C. See
830 CMR
62C.33.1: Interest, Penalties, and
Application of Payments.
(b)
Interest. Any
portion of the PFML contributions that is not paid on or before the due date of
a PFML return will have added to it interest from the due date of the PFML
return to the date the PFML contributions are paid at a rate prescribed by
M.G.L. c. 62C, § 32.
