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Paid Family And Medical Leave Massachusetts Effective October 1, 2019 (Doc ID 2577848.1)

Last updated on SEPTEMBER 03, 2019

Applies to:

Oracle HRMS (US) - Version 12.1.3 and later
Information in this document applies to any platform.

Symptoms

On : 12.2 version, US Payroll Tax Issues

ACTUAL BEHAVIOR
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There is a new Massachusetts family and medical leave tax that is effective October 1, 2019.

"Massachusetts New Payroll Tax in October 2019

Massachusetts has signed legislation that creates a new payroll tax, beginning on October 1, 2019, to fund the new state family and medical leave program (see 6-29 Payroll Update). The payroll tax applies to most Massachusetts employers, other than employers with less than 25 employees in Massachusetts. An employer or a covered business entity with a workforce that
has more than 50% self-employed individuals, for whom the employer must report the payment for services to such individual on IRS Form 1099-MISC, must include those self-employed individuals as employees for purposes of determining whether the employer is subject to this tax. The initial tax rate is 0.63% of an employee's wages. An employer may deduct 100% of the contribution from an employee's wages or self-employed individual's income for family leave. An employer may not deduct more than 40% of the contribution from an employee's wages for medical leave, and from a
self-employed individual's income, unless the contribution for the self-employed individual is for family leave. Contributions are not required for employee wages above the Social Security taxable wage base limit [L.H018, H4640]."

EXPECTED BEHAVIOR
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To have deductions for this tax take effect on the first payroll in October 2019

STEPS
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The issue can be reproduced at will with the following steps:
1. Process the first payroll in October 2019
2. Expect to see the new Massachusetts family and medical leave tax deducted from the employee's payroll
3. The initial tax rate is 0.63% of an employee's wages. An employer may deduct 100% of the contribution from an employee's wages or self-employed individual's income for family leave. An employer may not deduct more than 40% of the contribution from an employee's wages for medical leave, and from a self-employed individual's income, unless the contribution for the self-employed individual is for family leave.



Cause

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In this Document
Symptoms
Cause
Solution
References


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