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Intuit
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Massachusetts Paid Family Leave

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

    1. 1099-MISC contractors count toward your total number of covered individuals only if they make up more than 50 percent of your total workforce (W-2 employees and 1099-MISC contractors combined).
    2. Intuit does not support the E-file & Pay of Massachusetts Paid Family Leave with 1099 contractors. See the FAQ below for more details.
  1. Use this Paid Family and Medical Leave Contribution Calculator to determine what portion of the tax you are subject to based on the number of covered individuals.

    • Covered individuals may be responsible for up to 100% of the family leave contribution and 40% of the medical leave contribution. You can deduct from your covered individuals’ wages to cover the covered individual share.
      Important: In the payroll system, you must enter your share as percentage of total contribution and not as the actual rates.
      • If you have less than 25 covered individuals, you are not required to pay the employer share of the medical leave contribution but you may elect to cover a portion or all of the covered individual share.
      • If you have more than 25 covered individuals, you are required to pay the remaining employer share of the total contribution. The employer share is at least 60% of the medical leave contribution.
    • If you have more than 25 covered individuals, the total rate of .75% consists of .62% Medical leave and .13% Family leave. Our payroll service is programmed to have both taxes add up to .75%.  (Source: https://www.mass.gov/guides/a-guide-to-paid-family-and-medical-leave-for-massachusetts-employers#-employer-responsibilities-)
    • If you have less than 25 individuals, your rate is .378% which consists of .248% Medical leave and .13% Family leave.  Review the MA paid Family Leave website for your rate.

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

Online Payroll

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.

Notes:
    • If the employer has 1-24 covered individuals, the Medical leave total percentage between Employer and Employee needs to add up to 40%.

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%).

    • If the employer has 25+ covered individuals, the Medical leave total percentage between Employer and Employee needs to add up to 100%.

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%).

  1. Go to Workers and select Employees.
  2. Select the employee's name.
  3. Select Edit employee.
  4. In the withholding sections, select Edit.
  5. Select Massachusetts state taxes, and fill in the following fields:
    1. Medical Leave employer share: Company share percentage as a whole number (no decimals). Example: 60.
    2. Medical Leave covered individual share: Employee share percentage as a whole number (no decimals). Example: 40.
    3. Family Leave Employer Share: Company share percentage as a whole number (no decimals). Example: 0.
    4. Family Leave covered individual share field. Enter the employee share percentage as a whole number (no decimals). Example: 100.
  6. Select Done.
  7. Repeat for each covered employee.

  1. Go to Employees and select the employee's name.
  2. In the Taxes & Exemptions or Taxes section, select Edit.
  3. In the MA state section, fill in the following fields:
    • Medical Leave Employer share:  Company share percentage as a whole number (no decimals). Example: 60.
    • Medical Leave Covered Individual share: Employee share percentage as a whole number (no decimals). Example: 40.
    • Family Leave Employer share: Company share percentage as a whole a whole number (no decimals). Example: 0.
    • Family Leave Covered individual share: Employee share percentage as a whole number (no decimals). Example: 100.
  4. Select OK.

Desktop Payroll

A payroll update (21916)  was released last September 19, 2019.

  1. 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.
  2. 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.
  3. 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.

After you install tax table 21916, the Add Payroll Item prompt will help you create the 4 new payroll items. Follow the on-screen wizard to set up the items.

If you do not see the Add Payroll Item prompt this may mean that the 4 items were already set-up in QuickBooks. You may go to Payroll set up wizard to enter the rates for each items.

Important:

  1. During the payroll set up, be sure to select NO when asked if the payroll item is included in the unemployment rate.
  2. The account number is your FEIN number.
  3. 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.
  4. If you are using Assisted payroll, the account number is your MA DOR Account Number with PFM in front of it (for example, PFM-12345678-123).
  5. For each new Payroll Item, add the employer account number and vendor name (Commonwealth of Massachusetts). This is needed for the payment due for the fourth quarter of 2019.

  1. The new deduction must be finalized in QuickBooks for each employee before you issue the first paycheck in October 2019. There are two ways to do this:

Option 1: In the QuickBooks Employee Center

  1. Go to Employees and select Employee Center.
  2. Double-click the employee's name to open the Edit Employee window.
  3. Go to the Payroll Info tab and select Taxes.
  4. In the Taxes screen that pops up, select the Other tab.
  5. Select the MA - Paid Medical Leave Co.  line. In the Co. Portion Rate field, enter the company share of the premium portion rate as a whole number (no decimals). Example: 60.
  6. Select the MA - Paid Medical leave Emp. line. In the Emp. Portion Rate field, enter the employee share of the premium portion rate (no decimals). Example: 40.
  7. Select the MA - Paid Family Leave Co.  line. In the Co. Portion Rate field, enter the company share of the premium portion rate as a whole number (no decimals). Example: 0.
  8. Select the MA - Paid Family Leave Emp. line. In the Emp. Portion Rate field, enter the employee share of the premium portion rate (no decimals). Example: 100.
  9. Repeat for each covered employee.

Option 2: Through the Payroll setup

  1. Go through the payroll setup wizard.
  2. In the Employee setup screen, put a check mark next to the following taxes and enter the share of the premium portion rate int the Emp. Portion Rate and Co. Portion Rate fields for each tax.
    • MA - Paid Medical Leave Co.
    • MA - Paid Medical leave Emp.
    • MA - Paid Family Leave Co.
    • MA - Paid Family Leave Emp.

Pay and file the payroll item

If the customer changed tax rates after creating paychecks, they must do a per employee liability adjustment. Follow the steps in Adjust payroll liabilities to complete the adjustments. Auto adjustments (Control 4/w or Payroll Checkup) will not work for this tax.Notes:

  • The account number is their FEIN number.
  • For Assisted payroll, the account number is their MA DOR Account Number with PFM in front of it (for example, PFM-12345678-123).
  • The wage base on this new tax is the same as the Social Security wage base.
  • For QuickBooks Desktop DIY payroll, filing and payment information will be posted as the agency provides further details on how to file and pay the tax in January 2020.
  • For QuickBooks Assisted payroll: Intuit will pay and file for you, excluding 1099 Contractors. See the FAQ below.
  • QuickBooks Online Full Service Payroll and Intuit Online Full Service Payroll: Intuit will pay and file for you, excluding 1099 Contractors.  See the FAQ below.
  • QuickBooks Online Payroll Enhanced and Intuit Online Service Payroll: Filing and payment information will be posted as the agency provides further details on how to file and pay the tax in January 2020.

FAQ

In order to accommodate the differences in employee and employer liabilities based on the number of covered individuals, we have programmed our payroll systems to calculate the rates as percentage of shares. This matches the Paid Family and Medical Leave Contribution Calculator provided by the state of Massachusetts.

Yes, 1099 contractors should be included in the calculation of the Paid Family leave tax. Use this Paid Family and Medical Leave Contribution Calculator to determine how 1099s contractors are included in your calculations.

Intuit cannot include 1099 contractors in our payment or filings. You must add your contractor information via the state website.

If you already paid employees in October before these tax items are released:

  • For QuickBooks Desktop payroll, adjust payroll liabilities per employee to catch up.
  • For online payroll, contact us for recalculation. From the Help section in your online payroll, select Contact us to connect with a payroll support.

Yes. The Massachusetts Paid Family Leave follows the same wage limit as Social Security.

Since this tax will start on October 1, 2019, it will calculate as if October 1 is the beginning of the year. For example, if an employee has met the social security wage base before October first, this tax will calculate until the employee reaches the wage limit again until December 31st. In 2020 it will use the Social Security wage base for that year but calculate wages for the entire year up to the limit.

If your employee needs to file a claim, visit the Massachusetts website for more information.

If you want to exempt an employee from MA PFML, here's what you need to do:

  1. Enter 100% in the employee premium fields (40% for Medical Leave if  you have 1-24 covered individuals).
  2. In the Exemptions section, select Edit.
  3. Select MA Paid Family and Medical Leave Premium, then Save.
  4. Select OK.

 

Visit the MA Paid Family Leave for employers website for additional FAQ.

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