Unemployment Insurance Tax (FUTA/SUTA): Massachusetts
Federal law and guidance on this subject should be reviewed together with this section.
Author: Vicki M. Lambert, The Payroll Advisor
- Massachusetts uses the ABC test to determine whether a worker is an employee for state unemployment insurance (SUI) coverage purposes. Under the test, all work performed by an individual for compensation is deemed to be covered employment, unless certain conditions are met. See ABC Test.
- For SUI tax purposes, taxable wages include all forms of compensation paid to an employee by an employer for work performed. See SUI Taxable Wages.
- Employer SUI contribution rates are assigned depending on which rate schedule is in effect for the year and the employer's experience rating. See Contribution Rates; Experience Rating Method.
- The Massachusetts SUTA dumping law varies from the federal model law by providing higher penalty amounts. See SUTA Dumping.
- Massachusetts employers can choose to pay additional voluntary contributions in order to lower their experience rating, and reduce their SUI contributions for the forthcoming year. Joint or combined accounts are not permitted. See Voluntary Contributions; Joint or Combined Accounts.
- All employers, even those that are not required to make SUI contributions, must file employee wage records electronically (no paper forms) on a quarterly basis to the Department of Unemployment Assistance. Penalties are imposed for noncompliance. Multiple worksite reporting is voluntary. See Quarterly Reporting Requirements; Multiple Worksite Reporting.
- An employer's SUI account will not be relieved of charges for a benefit overpayment caused by the employer's failure to respond timely or adequately to a request for information relating to the underlying benefit claim. See Benefit Overpayments.
- All employers must keep certain records for SUI purposes for a certain number of years. See Recordkeeping Requirements.
- All Massachusetts employers that are required to make SUI contributions and have an average of six or more employees in a quarter are also required to make Employer Medical Assistance Contributions (EMACs). EMACs are based on each employee's wages paid up to the SUI taxable wage base in effect. Effective January 1, 2018, through December 31, 2019, employers must pay an additional 5% EMAC tax (or penalty) of up to $750, for certain non-disabled employees. See Employer Medical Assistance Contributions.