Current through Register 1531, September 27, 2024
(1)
General. Under M.G.L. c. 62C, § 55A(a)(9) and
(d), certain amounts payable to or received by a taxpayer as wages or salary
for personal services or as income from other sources are exempt from levy. 830
CMR 62C.55A.1, describes what amount of wages, salary, and other income payable
to or received by a taxpayer is eligible for the exemption from levy and
describes how pay periods are determined. 830 CMR 62C.55A.1, defines the term
"dependent" for purposes of determining amounts exempt from levy, and explains
the procedure for the taxpayer to claim any dependent exemptions. Finally, 830
CMR 62C.55A.1, explains how the payor should submit to the Commissioner amounts
not exempt from levy.
(2)
Definitions. For purposes of 830 CMR 62C.55A.1, the
following words have the following meanings, unless the context otherwise
requires:
Commissioner, the Commissioner of
Revenue or the Commissioner's designee.
Day, for purposes of 830 CMR
62C.55A.1(5) and (6), the term "day" does not include Saturdays, Sundays or a
legal holiday within the meaning of M.G.L. c. 4, § 7 and Section 7503 of
the Internal Revenue Code in effect on July 1, 1983.
Dependent, a person described in
M.G.L. c. 62C, § 55A(d)(1)(B) and 830 CMR 62C.55A.1(5), and a person
defined in Section 152(a)(1) through (a)(9) of the Internal Revenue Code in
effect on July 1, 1983.
Payor, the employer or other person
obligated to pay the taxpayer wages, salary, and other income and upon whom the
Commissioner's levy is served with respect to such wages, salary, and other
income.
Pay period, a period of time for which
any wages, salary, and other income are payable to or received by a taxpayer.
The rules for determination of a pay period are found in 830 CMR
62C.55A.1(4).
Taxpayer, any person whose wages,
salary, and other income are subject to levy by the Commissioner.
Wages, salary, and other income, all
income from whatever source derived, including, but not limited to, the items
specified in Section 61 of the Internal Revenue Code in effect on July 1, 1983,
and including, but not limited to, the items specified in M.G.L. c. 62, §
2(1), but excluding any amounts listed as being exempt from levy under M.G.L.
c. 62C, § 55A(a)(1) through (a)(9).
(3)
Determination of Exempt
Amount. Out of amounts payable to the taxpayer as wages, salary,
and other income for each pay period described in 830 CMR 62C.55A.1(4), the
following amounts are exempt from levy:
(a) If
the pay period is daily: $15 personal exemption, plus $5 for each person who is
claimed as a dependent pursuant to 830 CMR 62C.55A.1(5).
(b) If the pay period is weekly: $75 personal
exemption, plus $25 for each person who is claimed as a dependent pursuant to
830 CMR 62C.55A.1(5).
(c) If the
pay period is once every two weeks: $150 personal exemption, plus $50 for each
person who is claimed as a dependent pursuant to 830 CMR
62C.55A.1(5).
(d) If the pay period
is twice in a calendar month: $162.50 personal exemption, plus $54.17 for each
person who is claimed as a dependent pursuant to 830 CMR
62C.55A.1(5).
(e) If the pay period
is monthly: $325 personal exemption, plus $108.33 for each person who is
claimed as a dependent pursuant to 830 CMR 62C.55A.1(5).
(f) If the pay period is not daily, weekly,
once every two weeks, twice in a calendar month, or monthly: a proportionate
amount determined by multiplying the sum of an annual personal exemption of
$3,900, plus an annual dependent exemption of $1,300 for each person who is
claimed as a dependent pursuant to 830 CMR 62C.55A.1(5), by a fraction the
numerator of which is the number of hours, days, weeks, or months, whichever is
applicable, in the pay period, and the denominator of which is the
corresponding number of hours, days, weeks, or months in a calendar year.
Example: Taxpayer A, an employee of
the X corporation, is paid wages of $600 every three weeks and has two
dependent children. The amount of wages exempt from levy for taxpayer A for
each three week pay period is:
(3,900 + (2 x 1,300)) x 3 weeks = $375.00
52 weeks
(4)
Determination of Pay
Period. For purposes of determining the amount of wages, salary,
and other income exempt from levy under M.G.L. c. 62C, s. 55A(a)(9) and (d),
the pay period shall be determined as follows:
(a)
Regularly Used Pay
Periods. A regularly used pay period is an established period of
time, regularly used by a payor, for which wages, salary, and other income are
payable to or received by a taxpayer. Regularly used pay periods include, but
are not limited to, pay periods which are daily, weekly, once every two weeks,
twice in a calendar month, and monthly.
(b)
Amounts Paid on Irregular but
Recurrent Basis. In the case of wages, salary, and other income
paid to the taxpayer on an irregular but recurrent basis, the first day of the
taxpayer's pay period is the day following the day upon which the wages,
salary, and other income were last paid to the taxpayer. The last day of the
pay period is the day upon which the current payment becomes payable to the
taxpayer. However, where amounts are paid to the taxpayer on an irregular but
recurrent basis and more than 60 days lapse between the current payment and the
last payment, the current payment will be deemed a one-time payment. See 830
CMR 62C.55A.1(4)(c).
(c)
One-time Payment. If a taxpayer is paid wages, salary,
and other income on a one-time basis, the taxpayer's pay period is deemed to be
weekly, and the deemed one-week pay period ends on the day of payment. See 830
CMR 62C.55A.1(4)(b).
(5)
Dependent Exemption.
(a)
Dependent
Defined. For purposes of M.G.L. c. 62C, § 55A(d)(1)(B) and
830 CMR 62C.55A.1(3), a person is a dependent of the taxpayer for any pay
period of the taxpayer, if
1. Over half of
that person's support for the pay period was received from the taxpayer,
and
2. The person either is the
taxpayer's spouse or bears, on the last day of the pay period, a relationship
to the taxpayer specified in Section 152(a)(1) through (a)(9) (relating to
definition of dependent) of the Internal Revenue Code in effect on July 1,
1983, and
3. The person is not the
taxpayer's minor child with respect to whom amounts are exempt from levy under
M.G.L. c. 62C, § 55A(a)(8) (relating to exemption from levy for judgments
for support of minor children) at any time during the pay period.
For purposes of 830 CMR 62C.55A.1(5)(a)2., "pay period" should
be substituted for "taxable year" each place it appears in I.R.C. §
152(a)(9).
(b)
Claim for Dependent Exemption. No amount will be
exempt as a dependent exemption unless the payor submits a claim for dependent
exemption. A claim for dependent exemption shall be made by either completion
of a DOR Statement of Exemptions Form, or a written statement that:
(i) identifies by name and by relationship to
the taxpayer each person for whom a dependent exemption is claimed,
(ii) is signed by the taxpayer, and
(iii) contains a declaration that
it is made under the penalties of perjury.
(c)
Delivery of Statement of
Exemptions to Taxpayer. Generally, the Commissioner will deliver
to the payor a Statement of Exemptions upon which the taxpayer claims any
dependent exemptions. The Statement of Exemptions will accompany the DOR Notice
of Levy Form. The payor must promptly deliver the Statement of Exemptions to
the taxpayer.
(d)
Submission of Statement of Exemptions to Payor. The
taxpayer must submit the Statement of Exemptions to the payor no later than the
third day before the last day of the pay period for which the dependent
exemptions are claimed. If the levy is made on or after the third day before
the last day of the pay period, the taxpayer must submit the Statement of
Exemptions to the payor no later than two days after the day the taxpayer
receives the form. The payor may accept a Statement of Exemptions at any time
as long as payment to the Commissioner is made in accordance with 830 CMR
62C.55A.1(6).
(e)
Failure to Submit a Statement of Exemptions. If the
taxpayer does not submit a Statement of Exemptions within the time specified in
830 CMR 62C.55A.1(5)(d), the taxpayer is entitled only to a personal exemption
for any pay period.
(f)
Effect of Statement of Exemptions. A Statement of
Exemptions is effective for all pay periods until the taxpayer submits to the
payor an amended Statement of Exemptions, or until the liability is paid in
full and a release of levy is issued, or until the levy becomes unenforceable
by reason of lapse of time.
(g)
Validity of Statement of Exemptions. The Commissioner
has the authority at any time to determine the validity of the Statement of
Exemptions. The Commissioner may determine the proper number of dependent
exemptions to which a taxpayer is entitled. Upon notification by the
Commissioner, the payor shall use the number of dependent exemptions determined
by the Commissioner.
(6)
Payment to Commissioner of Amounts Not Exempt from
Levy.
(a)
General
Rule. The payor is required to make payment to the Commissioner on
the date the payor is otherwise obligated to pay the taxpayer.
(b)
Delayed Payment in Certain
Cases. If the levy is served on the payor on or after the third
day before the last day of the pay period, the payor is required to make
payment to the Commissioner no later than five days after the day the levy is
served on the payor.
