| NEWS and FEATURE ARTICLES WE HAVE RECEIVED LATE BREAKING NEWS THAT OUR PAYROLL VENDOR, PAYCHEX, CAN IN FACT CALCULATE AND FILE THE MCTMT FOR CLERGY AS WELL AS LAY. ACCORDINGLY, PLEASE DISREGARD THE SECTION OF MY EARLIER EMAIL (BELOW) CONCERNING REQUIREMENTS FOR CLERGY TO FILE ON THEIR OWN. Dear colleagues: In early June I apprised you via email of this new tax indicating at that time that church employers would be subject to the tax and that we would seek clarification of the new law and its implementation. The purpose of this communication is to now provide you with the details of that implementation – which differ for lay and clergy. The Metropolitan Commuter Transportation Mobility Tax (MCTMT) is a new tax imposed by New York State on certain employers and self-employed individuals engaging in business within the Metropolitan Commuter Transportation District (MCTD) which consists of the five boroughs of New York City and the counties of Nassau, Suffolk, Dutchess, Orange, Putnam, Rockland and Westchester. Church Employers - Lay Employees For churches participating in Episcopal Payroll Services through the diocese (i.e., via Paychex) the tax payments to New York State will be made by Paychex in accordance with the tax law requirements. Churches utilizing other outside payroll vendors or processing their own payrolls should make certain that this new tax is handled properly. More information is available at http://www.tax.state.ny.us/mctmt/emp.htm
The MCTMT applies to individuals who have net earnings from self-employment that exceed $10,000 for the tax year. The tax rate is 0.34% (.0034) of net earnings from self-employment during the tax year. The effective date for the new tax is January 1, 2009. For 2009, the tax liability is calculated on 10/12 of net earnings from self-employment. The initial estimated tax payment is due November 2, 2009. As clergy are self employed for Social Security purposes they are also being treated as self employed for the purposes of this tax. Social security wages are the basis used by New York State for MCTMT tax calculations. Clergy must make estimated tax payments directly to New York State for the MCTMT. The first payment for 2009 is due on 11/02/2009. The second payment is due on 02/01/2010 and an annual reconciliation return must be filed by 04/30/2010. It is strongly recommended that clergy consult their tax advisors/preparers for assistance with this tax. To determine the amount of tax yourself, please refer to Form SE (http://www.irs.gov/pub/irs-dft/f1040sse--dft.pdf). Your 2008 tax return includes this form but the amounts reported must be updated for 2009 in order to determine the 2009 amount of "net earnings from self-employment.” Then, multiply your net earnings from self-employment by 10 and divide by 12 to determine the amount of earnings applicable for the first payment. Multiply the earnings by 0.34% (.0034) to determine the tax due. Payments may be made online or by mail (http://www.tax.state.ny.us/pdf/2009/fillin/mctmt/mta5_2009_fill_in.pdf). For further information on the MCTMT go to http://www.tax.state.ny.us/mctmt/ind.htm Please feel free to contact Peter Robey or Dorothy Sherlock in the diocesan accounting office should you have any questions. Louise M. Baietto |