Professional employer organizations (PEOs) – metropolitan commuter transportation mobility tax (MCTMT)

If you are a PEO (as defined in section 916 of the Labor Law; see TSB-M-12(2)MCTMT, Computation of the Metropolitan Commuter Transportation Mobility Tax for Professional Employer Organizations) you must calculate your MCTMT due based separately on:

• the payroll expense of your own organization; and
• the payroll expense of each client with whom you have entered into a professional employer agreement.

See MCTMT page for Employers for general information on who the tax does and does not apply to, definitions, and due dates.

Calculating the tax

• For purposes of calculating the MCTMT, the Metropolitan Commuter Transportation District (MCTD) is divided into two zones:
  • Zone 1 includes the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, and Richmond (Staten Island).
  • Zone 2 includes the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.
• Separately calculate the payroll expense in both Zone 1 and Zone 2 for all covered employees for each calendar quarter for your organization and for each of your clients.
• Multiply each payroll expense amount by the applicable MCTMT rate from Table 1 and Table 2 below.
• Add together the MCTMT amounts calculated based on the payroll expense in both zones for your organization and each client. This is your total MCTMT due.

Note: In order to be subject to the MCTMT for the quarter, the employer must have payroll expense in the entire MCTD (both Zone 1 and Zone 2) greater than $312,500.

Example: An employer has payroll expense within the MCTD of $650,000. $450,000 of that payroll expense is attributable to Zone 1 and $200,000 of that payroll expense is attributable to Zone 2. The employer’s MCTMT liability is $2,920 ([$450,000 x 0.60%] + [$200,000 x 0.11%]).

Table 1:

Table 2:

Mandatory and voluntary PrompTax program participants who cannot calculate their quarterly payroll expense at the beginning of a calendar quarter should see Employers participating in the PrompTax program.

PEO's PrompTax payments

• You will need to continue making PrompTax payments if you are required or voluntarily participate in the PrompTax program.

Note: The optional MCTMT calculator will not properly calculate your tax; you must figure the payment as instructed above.

PEO's quarterly MCTMT return

• Filing due dates for your MCTMT quarterly returns are the same as any other employer.
• You must file your MCTMT returns using the Tax Department's Online Services MCTMT Upload. See the file formatting instructions for how to format your file.

Note: If any of your clients are a START-UP NY business you cannot include them in your upload.

• You must separately Web File Quarterly MCTMT returns for each START-UP NY business. See the START-UP NY MCTMT Exemption on how to calculate the MCTMT due.
• In addition, you must separately report eligible employees for each START-UP NY business annually by January 31. See the START-UP NY Employer Information web page for employer requirements.

For more information, see:

• TSB-M-12(2)MCTMT, Computation of the Metropolitan Commuter Transportation Mobility Tax for Professional Employer Organizations.