The state of Massachusetts has implemented a new Paid Family Leave program that goes into effect on October 1, 2019.
All Payroll Services
Use the new MA Paid Family Medical Leave account ID number example PFM-12345678-123. You may need to sign up through MA's site if you do not have the account number yet.
Note: Online customers will have ability to enter MA Paid Family Medical Leave account ID by 12/6/2019.
What is the tax?
The total insurance premium is .75% for 2019 and is calculated on employee's gross wages up to the Social Security limit. The employee and employer may split the payment of the full premium.
If you have less than 25 covered individuals, your combined rate is .378%.
To learn more, visit Massachusetts Paid Family and Medical Leave website.
We will be releasing a payroll update that will allow you to set up the deductions for employees and company contribution (if any) to comply with this tax.
How to determine the rates
Figure out how many covered individuals (employees and contractors) you have.
Determine what tax rate you are subject to and how to split up the employee and employer tax rates.
You must enter the share of the employer and covered individual contribution so we can calculate correctly.
The 4 items are:
- Medical Leave Employer share
- Medical Leave Covered individual share
- Family Leave Employer share
- Family Leave Covered individual share
Intuit will automatically recalculate paychecks from October 1st to released date to catch up for missing taxes.
Enter the company and employee's share of premium insurance rates in your online payroll service.
The ability to enter your MA Paid Family Medical Leave account number will be available on 12/6/2019.
For example, if the employer wants to split the cost 50/50 with the employee, the employee and the employer rates would be 20% each (totaling 40%).
For example, if the employer wanted to split the cost of the tax with the employee (up to 40%), they would enter 40% for employee and 60% for employer (totaling up to 100%).
A payroll update (21916) was released last September 19, 2019.
- You are required to set up the deductions for the employees and company contribution (if any) to comply with this tax. If the items were not set up yet, QuickBooks will invoke Add Payroll Item prompt.
- Use this Add Payroll Item prompt in setting up the shared responsibility of the total insurance premium, and assigning them to your employees. You must enter the percentage of the total insurance premium each employee will pay, as well as the percentage the employer will pay - if any - in the applicable fields.
- If your company already provides Paid Family and Medical Leave to all your employees, the agency will allow this tax to be marked as “EXEMPT” in QuickBooks desktop by entering zero to all four items.