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MA DOR Issues Notice Of Exemption From Paid Family And Medical Leave Contributions For Payments To Individuals Reported On IRS Form 1099-NEC

6 May 2020 11:22 AM | MaSEA Staff (Administrator)

IRS Form 1099-NEC compensation is now exempt from paid family and medical leave [PFML] contributions, according to a recent email from the Massachusetts Department of Revenue. You can view all of the information below. 

As you may know, the IRS now requires non-employee compensation paid to individuals on or after January 1, 2020 to be reported on IRS Form 1099-NEC. Previously, non-employee compensation was reported on Form 1099-MISC, box 7.
 
PFML contributions are required with respect to certain payments to individuals reported on IRS Form 1099-MISC. The Department of Family and Medical Leave [DFML] has determined that employers who employ individuals whose compensation as of January 1, 2020 will now be reported on IRS Form 1099-NEC are no longer required to make contributions on behalf of these individuals. While contributions are not required, the individuals may choose to 
opt in to the PFML program.
 
Refunds of contributions already made with respect to IRS Form 1099-NEC compensation
Employers who made contributions on behalf of individuals whose compensation as of January 1, 2020 will be reported on IRS Form 1099-NEC, should now file amendments to the original PFML returns reporting such contributions. An amended return should be filed excluding any contributions that were made with respect to IRS Form 1099-NEC compensation. The amended filing will automatically trigger an overpayment and result in a refund to the filer of the return. Please note that contributions made between October 1, 2019 and December 31, 2019 on behalf of individuals whose compensation was reported on Form 1099-MISC are not eligible to be refunded.
 
How to amend your filings to exclude contributions made for IRS Form 1099-NEC compensation from January 1, 2020 through 
MassTaxConnect. You have two choices.
 
Amend your return by importing an Excel file:

  1. Log in to your MassTaxConnect account
  2. Choose your Paid Family Medical Leave account
  3. Choose the  period to be amended
  4. Under the I  Want To section choose File or amend a return
  5. Under the I Want To section choose Amend Return
  6. Choose Import From Excel 
  7. Choose Import
  8. Choose File from the Select a file to import window and choose the file to import.
  9. Once the file is has downloaded, choose Ok and provide a reason for amending the return
  10. Choose Next then Submit on the bottom right of the page where you will receive a Return Confirmation Number for your submission
  11. At the bottom of the confirmation page, you will have an option to make a payment if necessary or to print the confirmation page.

Manually entering data (No excel file):

  1. Log in to your MassTaxConnect account
  2. Find your Paid Family Medical Leave Account
  3. Choose the period to be amended
  4. Under the I  Want To section Choose File or amend a return
  5. Under the I Want To section Choose Amend Return 
  6. Enter the information to be corrected then Choose Next and provide a reason for amending the return on the following page
  7. Choose Next
  8. Confirm that the information is correct from the Return Summary page then chooseSubmit on the bottom right of the page where you will receive a Return Confirmation Number for your submission
  9. At the bottom of the confirmation page, you will have an option to make a payment, if necessary, or to print the confirmation page.


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