Massachusetts State Tax Routine (MATX)

The Massachusetts State Tax Routine Processing utilizes the following steps:

Line 1

Sum Year To Date amounts and the current pay cycle deductions (FICA,MEDICARE, Massachusetts, United States or Railroad Retirement systems), if the value is less than the cap of 2000, exempt this from SGA calculation. Determine the employee’s gross wages for the current payroll period 

Line 2

Subtract the amount deducted for Social Security (FICA), Medicare, Massachusetts, U.S. or Railroad Retirement for the pay period.*

Line 3

Multiply the employee’s gross wages in Line 2 by the number of payroll periods in a year to obtain their Annualized Gross Income (GI).

Line 4

Determine the employee’s Personal exemption credit

Determine the employee’s deductions:

  1. State Tax Allowance (TAX)

  2. Annual Exception Amount on TAXP

State Tax Allowance (TAX) multiply by Annual Exception Amount on TAXP.

Line 5

Determine the employee’s deduction:

  1. Standard Deduction Amount

Line 6

Determine the Wages subject to withholding.** 

Line 7

Determine the Amount of Tax Withholding, using the Marginal Tax Rates (DEDX) entries for the Massachusetts State Tax Routine.

  1. Tax Rate

  2. Base Tax Amount

Tax Rate Percent of the Wages subject to Withholding.

Line 8

Divide the amount on Line 7 by the number of payroll periods in a year to determine the employee’s Massachusetts Withholding Tax for the pay period.

* Determine the Deduction Category to be Excluded

Subtract  the  amount  deducted  for  the  U.S.  Social  Security  (FICA),  Medicare,  Massachusetts,  United  States  or  Railroad  Retirement  systems. The total amount subtracted may not exceed $2,000. When, during the year, the total amount subtracted reaches the equivalent of the $2,000 maximum allowable as a deduction by Massachusetts (As per 2024 Massachusetts State Tax Calculation).

  1. Enable “Exclude from state Tax calculation” check box in Deduction Category Page.

  1. Deduction Plan (DPLN) Setup for Massachusetts  State Tax Routine.

  1. Configure  the Amount/Percent 1 for the maximum allowable as a deduction by Massachusetts during the year.

** Determine the Wages Subject to Withholding

  1. Summ Employee Deduction (Line 4) and Employee Personal Exemption Credit (Line 3).

  2. In order to derive the Wages Subject to Withholding subtract the sum value (Point 1) from Line 2.

Data Setup Considerations

Sites need to ensure that they have implemented the following Business Process/Data Setup changes at their site prior to using the Massachusetts State Tax Routine.

  1. The Tax Parameters (TAXP) setup for Massachusetts.

  1. Personal exemption amount is captured as part of the Annual Exemption Amount.

  2. Standard Deduction Amount is captured as a part of Maximum Standard Deduction.

  1. The Employee Tax Parameter (TAX) enrollment.

  1. The State Tax Allowance field captures the employee's claim for the number of exemptions.

Note: The point 2 functions if the MULTI_STATE_TAX parameter is set to N as part of the Application Parameter (APPCTRL) page, if the parameter is set to Y, then the system functions as per point 3.

  1. Employee enrolled in the State Tax Enrollment (TAXS) (Note: this only applies to employees enrolled in the State Tax Class (TAXCS) that includes a Massachusetts State Tax Deduction).

  2. The State Tax Allowance field captures the employee's claim for the number of exemptions.

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