Important: 
 
   As a result of recent law changes, the information in this publication relating to 
the computation of metropolitan commuter transportation mobility tax (MCTMT) is out 
of date and cannot be relied upon by:  
    
 •  Employers for tax quarters beginning on or after July 1, 2023, and 
 
 •  Self-employed individuals for taxable years beginning on or after January 1, 
   2023.   
    
 For up-to-date information on the following sections:  
 
 • General information on page 5 -- The MCTD is divided into two zones.  See 
   Metropolitan commuter transportation mobility tax. 
    
 • MCTMT rates on pages 11 – 12 – For tax quarters beginning on or after July 1, 
   2023, the tax rates for employers are obsolete.  See Employers: metropolitan 
   commuter transportation mobility tax (MCTMT). 
                                                               
 • For individuals with net earnings from self-employment the information beginning 
   on page 16 pertaining to self-employed individuals is obsolete for taxable years 
   beginning on or after January 1, 2023.* 
 
*Note: Updates to this and other guidance regarding the legislative changes to the 
MCTMT imposed on certain self-employed individuals engaging in business within the 
MCTD will be announced at a later date. Please consider subscribing to receive email 
notifications from the Department with the latest MCTMT guidance. 

[See Part Q of Chapter 58 of the Laws of 2023] 
     
                   Publication 420 begins on page 2 below. 
 
  W A Harriman Campus, Albany NY 12227                             www.tax.ny.gov 
                                          
                            Insert added on July 21, 2023. 
 

Publication 420

Guide to the 

Metropolitan Commuter

Transportation Mobility Tax

                           Pub 420 (8/15)

Note: A Publication is an informational document that addresses a particular topic of interest to 
taxpayers. Subsequent changes in the law or regulations, judicial decisions, Tax Appeals Tribunal 
decisions, or changes in department policies could affect the validity of the information contained in a 
publication. Publications are updated regularly and are accurate on the date issued. The information 
provided in this document does not cover every situation and is not intended to replace the law or 
change its meaning.

                                                                     Publication 420 (8/15) 

Table of Contents                                                    Page 
 
I.  Introduction .............................................................................................................................................. 5 
 
  General .............................................................................................................................................. 5 
   SUNY Tax-Free Areas to Revitalize and Transform Upstate New York  
   (START-UP NY) program ............................................................................................................. 5 
 
II.  Employers ................................................................................................................................................ 6 
   
  General .............................................................................................................................................. 6 
  Definitions .......................................................................................................................................... 6 
  Employers of household help ............................................................................................................. 7 
  Leased employees ............................................................................................................................. 7 
  Third-party sick pay ............................................................................................................................ 7 
  Determining if an employee is a covered employee ........................................................................... 7 
  Computing the amount of payroll expense ......................................................................................... 9 
   Payments not considered wages for purposes of the MCTMT .................................................... 10 
  MCTMT rates ................................................................................................................................... 11 
   Computation of the MCTMT for professional employer organizations ......................................... 12 
   Prohibition from deducting MCTMT from employees’ wages or compensation ........................... 12 
  Quarterly filing requirements and payment of the MCTMT ............................................................... 12 
   Employers not required or electing to participate in the PrompTax program ............................... 13 
   PrompTax filers .......................................................................................................................... 13 
  Penalties and interest ....................................................................................................................... 15 
  Collection of debts from an overpayment of MCTMT ........................................................................ 15 
  Amending MCTMT returns ............................................................................................................... 15 
  Treatment of the MCTMT on New York State tax returns ................................................................. 16 
 
III.  Individuals with net earnings from self-employment ............................................................................... 16 
 
  General ............................................................................................................................................ 16 
  Definitions ........................................................................................................................................ 17 
  Net earnings from self-employment – Special situations .................................................................. 18 
   Nonresident aliens ...................................................................................................................... 18 
   Certain church employees .......................................................................................................... 18 
   Members of the clergy and Christian Science practitioners ........................................................ 18 
  Allocation of net earnings from self-employment .............................................................................. 18 
  Tax rate ............................................................................................................................................ 19 
  Estimated MCTMT payments ........................................................................................................... 19 
   Penalty for underpayment of estimated MCTMT ......................................................................... 20 
  Reporting annual MCTMT information .............................................................................................. 20 
  Penalties and interest ....................................................................................................................... 21 
  Overpayments of tax ........................................................................................................................ 21 
   Collections of debts from an overpayment of tax ........................................................................ 21 
  Amending MCTMT information  ........................................................................................................ 22 
  Treatment of the MCTMT on New York State personal income tax returns ...................................... 22 
 
                                  3 

Publication 420 (8/15) 

Table of Contents (continued)                          Page 
 
IV. Special rules for partnerships and partners ............................................................................................ 22 
 
  General ............................................................................................................................................ 22 
  Net earnings from self-employment .................................................................................................. 23 
   Guaranteed payments to nonresident alien partners .................................................................. 23 
  Estimated MCTMT payments made on behalf of nonresident individual partners ............................. 23 
  Form IT-203-GR, Group Return for Nonresident Partners ................................................................ 24 
   Group overpayments of MCTMT ................................................................................................ 25 
   Amending MCTMT information on a group return ....................................................................... 25 
 
                              4 

                                                                              Publication 420 (8/15) 

I. Introduction 
 
                      This publication provides guidance, with regard to computing, reporting, 
                      and paying the metropolitan commuter transportation mobility tax (MCTMT) 
                      for tax years beginning on or after January 1, 2015. 
                       
                      For tax years beginning before January 1, 2015, see: 
                       
                       • TSB-M-09(1)MCTMT, Metropolitan Commuter Transportation Mobility 
                          Tax, and 
                       • TSB-M-12(1)MCTMT, Legislative Amendments to the      Metropolitan 
                          Commuter Transportation Mobility Tax. 
                       
                      To receive e-mail notifications containing links to newly posted MCTMT 
                      information, visit the Tax Department Web site (www.tax.ny.gov) and 
                      Subscribe to our e-mail service. 
                       
                      See Need help? on the back cover for information on obtaining forms, 
                      instructions, and publications from the Tax Department. 
                       
 General              The MCTMT is administered by the New York State Tax Department. 
                      However, the proceeds from this tax are distributed to the Metropolitan 
                      Transportation Authority.   
                       
                      The MCTMT is imposed on certain employers and individuals engaging in 
                      business within the metropolitan commuter transportation district (MCTD).  
                       
                      The MCTD includes New York City (the counties of New York (Manhattan), 
                      Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island)), and the 
                      counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and 
                      Westchester. 
                       
                      Note: Except for certain START-UP NY tax benefits, any exemption from 
                      tax allowed in any other New York State law does not apply to this tax. For 
                      example, if another law states that a certain New York public authority is 
                      exempt from any tax imposed by New York State or any political 
                      subdivision of the state, that exemption does not apply to the MCTMT. 
                      Additionally, no tax credit(s) may be used to reduce the amount of the 
                      MCTMT due.  
                       
 SUNY Tax-Free        Chapter 68 of the Laws of 2013 established the START-UP NY program. 
 Areas to Revitalize  Approved businesses in the START-UP NY program that are located in a 
 and Transform        tax-free NY area within the MCTD are eligible for an exemption from the 
 Upstate New York     MCTMT. 
 (START-UP NY)         
 program               • Employers. The MCTMT exemption eliminates the MCTMT on the 
                          payroll expense attributable to an approved business location within 
                          the MCTD for 40 consecutive calendar quarters, beginning with the 
                          calendar quarter the business locates in a tax-free NY area. 
                       
                                    5 

Publication 420 (8/15) 

                         • Self-employed individuals. The MCTMT exemption eliminates the 
                           MCTMT on net earnings from self-employment attributable to an 
                           approved business location within the MCTD for 10 consecutive 
                           years, beginning with the tax year the business locates in a tax-free 
                           NY area. 
                         
                        Employers and self-employed individuals who meet the MCTMT filing 
                        requirements discussed in this publication must report MCTMT information 
                        and file MCTMT returns with the department even if no tax is due.  
                         
                        For more information, including specific MCTMT reporting and filing 
                        requirements for approved businesses in a tax-free NY area, visit the 
                        START-UP NY program page on the Tax Department Web site.  
 
II. Employers 
 
 General                Employers are liable for the MCTMT for a calendar quarter if they are 
                        required to withhold New York State income tax from wages paid to 
                        employees and their payroll expense for all covered employees exceeds 
                        $312,500 for that calendar quarter.  
                         
                        An employer whose payroll expense for a quarter does not exceed 
                        $312,500 is not subject to the MCTMT for that quarter. This is true even 
                        though the employer’s payroll expense may have been more than 
                        $312,500 in a previous quarter.  
                         
 Definitions            The following definitions apply to the MCTMT for employers: 
                         
                         • Employer means any employer required by section 671 of the Tax 
                           Law to deduct and withhold tax from wages that has a payroll expense 
                           of more than $312,500 in any calendar quarter. However, agencies 
                           and instrumentalities of the United States; the United Nations; 
                           interstate agencies and public corporations created pursuant to an 
                           agreement or compact with another state or Canada; and eligible 
                           educational institutions are not subject to the MCTMT.  
                         
                           Note: For an employer to be considered an agency or instrumentality 
                           of the United States, a federal law must specifically state that the 
                           employer is an agency or instrumentality of the United States, or a 
                           decision in a federal court case must specifically state that the 
                           employer is an agency or instrumentality of the United States. (If there 
                           is a question on whether an employer is subject to the MCTMT under 
                           this definition, a request for an advisory opinion from the department 
                           may be made by filing Form AD-1.8, Petition for Advisory Opinion.) 
                         
                         • An eligible educational institution means any public school district; a 
                           board of cooperative educational services (BOCES); a public 
                           elementary or secondary school; a school approved pursuant to 
                           Article 85 or 89 of the Education Law to serve students with 
                           disabilities of school age; or a nonpublic elementary or secondary 
                           school that provides instruction in grade one or above. 

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                                                                       Publication 420 (8/15) 

                     • Payroll expense for covered employees subject to federal social 
                       security taxes means wages and compensation as defined in 
                       section 3121 of the Internal Revenue Code (IRC), without regard to 
                       section 3121(a)(1).  
                     
                       Section 3121 defines wages and compensation subject to federal 
                       social security taxes. However, in computing payroll expense, the cap 
                       on the amount of wages subject to social security taxes contained in 
                       section 3121(a)(1) of the IRC does not apply. Accordingly, for most 
                       employers, payroll expense is the amount of the employee wages or 
                       other compensation that is subject to the Medicare portion of the 
                       social security taxes.  
                     
                     • Payroll expense for covered employees subject to the railroad 
                       retirement tax means the total wages and compensation as defined in 
                       section 3231 of the IRC, without regard to section 3231(e)(2)(A)(i). 
                     
                       Section 3231 defines wages and compensation subject to federal 
                       railroad retirement tax. However, in computing payroll expense, the 
                       cap on the amount of wages subject to the railroad retirement tax 
                       contained in section 3231(e)(2)(A)(i) of the IRC does not apply. 
                     
                     • Covered employee means an employee (including a statutory 
                       employee) whose services are allocated to the MCTD (see 
                       Determining if an employee is a covered employee below). 
                     
 Employers of       Employers of household help are not required to deduct and withhold 
 household help     income tax from wages paid to household employees. Withholding income 
                    tax (federal or New York State) from wages paid to household employees is 
                    voluntary on the employer’s and the employee’s part. Therefore, 
                    employers of household help are not subject to the MCTMT on the payroll 
                    expense attributable to household employees. 
                     
 Leased             The determination of who is liable for the MCTMT for the payroll expense 
                    related to the wages or other compensation paid to a leased employee is 
 employees 
                    based on who is liable for the filing and payment of the social security tax. 
                    Accordingly, the employer who is liable for the filing and payment of social 
                    security tax is the employer liable for the MCTMT on the payroll expense 
                    for the leased employee. 
                     
 Third-party sick   The determination of who is liable for the MCTMT for the payroll expense 
                    related to the payment of third-party sick pay to an employee is based on 
 pay 
                    who is liable for the filing and payment of the social security tax. 
                    Accordingly, the employer who is liable for the filing and payment of social 
                    security tax is the employer liable for the MCTMT on the payroll expense 
                    for the employee. 
                     
 Determining if an  An employee, including a statutory employee, is considered to be a 
                    covered employee if the employee’s services are allocated to the MCTD. 
 employee is a 
                    To determine if an employee’s services are allocated to the MCTD, apply 
 covered            the following tests in the order presented below. If any test results in the 
 employee           allocation of the employee’s services to the MCTD, the employee is a 

                                      7 

Publication 420 (8/15) 

                       covered employee and no further test need be applied. Otherwise, proceed 
                       to the next succeeding test. 
                        
                        1) Localization – An employee’s services are allocated to the MCTD if 
                           those services are (1) performed entirely within the MCTD or (2) 
                           performed both in and outside of the MCTD, but the services 
                           performed outside the MCTD are incidental to the employee’s 
                           services performed within the MCTD (for example, are temporary or 
                           transitory in nature or consist of isolated transactions). 
                        
                        2) Base of operations – An employee’s services are allocated to the 
                           MCTD if the employee’s base of operations is in the MCTD. 
                           However, this test cannot be applied if the employee has no base of 
                           operations, or has more than one base of operations. 
                        
                           Base of operations means the place where the employee is not 
                           continuously located, but from which the employee customarily starts 
                           out to perform his or her functions within or outside the MCTD. The 
                           base of operations is where the employee customarily returns in 
                           order to receive instructions from his or her employer, 
                           communications from other persons, or to replenish stock and 
                           materials, repair equipment used, or to perform any other function 
                           necessary in the exercise of his or her trade or profession. 
                        
                        3) Place of direction and control – An employee’s services are 
                           allocated to the MCTD if the employee’s direction and control 
                           emanates only from within the MCTD, and the employee performs 
                           some services within the MCTD.   
                        
                           Direction and control means the place from which the employer 
                           directs and controls the activities of the employees. It is not 
                           necessarily the location of the principal office, but rather the point 
                           from which basic authority over the supervision of services emanates 
                           (for example, the place from which job assignments are made and/or 
                           instructions are issued, or the place at which personnel and payroll 
                           records are maintained). 
                        
                        4) Residence – If none of the preceding tests results in a clear 
                           allocation of services, all of the employee’s services are allocated to 
                           the MCTD if the employee resides in the MCTD and performs some 
                           services in the MCTD. If the employee either does not reside in the 
                           MCTD, or resides there but performs no services in the MCTD, the 
                           employee is not a covered employee. 
                        
                       Example 1: Company A is an employer with two offices in New York State, 
                       one in Ulster County and one in Dutchess County. Company A’s 
                       headquarters are located outside of New York State. 
                        
                       On December 1, Company A transferred two of its employees who are 
                       regularly assigned to the Ulster County office to work temporarily (until 
                       December 31) in the Dutchess County office. Effective January 1, the two 
                       employees returned to work in the Ulster County office. 

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                                                                         Publication 420 (8/15) 

                    The base of operations for both employees is considered to be the Ulster 
                    County office, and both employees are under the direction and control of 
                    Company A’s headquarters. Neither employee resides in the MCTD. 
                    Therefore, the two transferred employees are not covered employees for 
                    purposes of the MCTMT. Accordingly, when Company A computes the 
                    payroll expense for its covered employees it will not include the payroll 
                    expense for the two employees who were temporarily assigned to the 
                    Dutchess County office. 
                     
                    Example 2: Company B is an employer with retail store locations in the 
                    counties of Columbia, Ulster, Orange, Dutchess, Sullivan, and Rockland. 
                    The main office of the company is located in Dutchess County. 
                     
                    A district manager for Company B is assigned duties that include working in 
                    store locations in the counties of Columbia, Ulster (both outside the MCTD), 
                    and Dutchess (within the MCTD) on a regular basis. 
                     
                    The district manager’s work office is located in the main office of 
                    Company B (in Dutchess County). This work office is where the district 
                    manager customarily starts out to perform his job functions and where the 
                    district manager receives store reports and agendas. The Dutchess County 
                    office is considered the district manager’s base of operations. Therefore, 
                    the district manager is considered a covered employee for purposes of the 
                    MCTMT. When Company B computes the payroll expense for its covered 
                    employees, it will include the payroll expense for the district manager. 
                     
                    Example 3: Company C is an employer with its business office located in 
                    Albany County. 
                     
                    Company C employs Driver X, who lives in Manhattan, to maintain a 
                    regular pickup and delivery route. Driver X works in and out of the MCTD. 
                    Driver X works two days a week in New Jersey and three days a week in 
                    Manhattan. Driver X travels to the Albany County office only on an 
                    occasional basis. The Albany County office is where all job assignments 
                    are made and where personnel and payroll records are maintained. 
                     
                    Driver X is considered a covered employee because Driver X resides in the 
                    MCTD and performs some services in the MCTD. Therefore, when 
                    Company C computes the payroll expense for its covered employees, it will 
                    include the payroll expense for Driver X. 
                     
 Computing the      An employer cannot allocate the payroll expense for a covered employee 
                    who works both in and outside of the MCTD for the purpose of computing 
 amount of payroll 
                    the MCTMT. If an employee is considered a covered employee, then all of 
 expense            the payroll expense for that employee (for the time that employee is or was 
                    considered a covered employee) is included in the payroll expense for 
                    purposes of the MCTMT. 
                     
                    An employer must include in its quarterly payroll expense computation all 
                    wages or compensation (as defined under sections 3121 or 3231 of the 
                    IRC) paid in that quarter (including back pay, sick pay, deferred 
                    compensation, and bonuses that are wages or compensation under 

                                   9 

Publication 420 (8/15) 

                        sections 3121 or 3231 of the IRC) if the payment is attributable to services 
                        performed while the employee is or was a covered employee. Therefore, if 
                        any payment is made in a current quarter that is attributable to services 
                        performed in a prior quarter or quarters (including services performed 
                        before the MCTMT took effect), an employer must determine if the 
                        employee was a covered employee at the time the services were 
                        performed. 
                         
                        Example 4: Company D is an employer with its main business office 
                        located in the MCTD. Employee Z resides outside of the MCTD and works 
                        in a company office outside of the MCTD. Employee Z is due a 
                        performance bonus for services performed in the first quarter of the tax 
                        year. This bonus will be paid by Company D in the second quarter. 
                         
                        Midway through the second quarter of the tax year, Employee Z is 
                        permanently transferred to the main office in the MCTD. Employee Z is now 
                        considered a covered employee for purposes of the MCTMT.  
                         
                        When Company D computes the payroll expense for the second quarter of 
                        the tax year, it must include the payroll expense for Employee Z for 
                        services performed as of the date Employee Z started working in the 
                        MCTD. However, Company D will not include the payroll expense for 
                        Employee Z’s first quarter performance bonus because the bonus is 
                        compensation earned by Employee Z for a period when Employee Z was 
                        not a covered employee. 
                         
                        Example 5: Company E is an employer with business offices in several 
                        states including an office in New York City (Manhattan). Company E is 
                        subject to the MCTMT based on the payroll expense of its employees 
                        working in its Manhattan office. 
                         
                        A sales manager has worked in the Manhattan office for the entire calendar 
                        year and is a covered employee for purposes of the MCTMT. Effective 
                        January 1 of the next tax year, the sales manager will be permanently 
                        transferred to one of Company E’s offices in another state.  
                         
                        The sales manager is entitled to receive a bonus based on his last six 
                        months of service in the Manhattan office. Company E will not pay that 
                        bonus until the third quarter of the next calendar year. 
                         
                        When Company E computes the payroll expense for the third quarter of the 
                        year following the sales manager’s transfer, it must include the payroll 
                        expense for the bonus paid to him, because the sales manager was a 
                        covered employee for the period the bonus is based on. 
                         
 Payments not           As previously stated, payroll expense includes wages or compensation as 
 considered wages       defined under sections 3121 and 3231 of the IRC (see page 7). The 
 for purposes of the    following are some common examples of services where remuneration 
 MCTMT                  (payment) for employment is not considered wages or compensation under 
                        section 3121 or 3231 of the IRC, and should not be included in the 
                        employer’s payroll expense for purposes of computing the MCTMT, even if 
                        the employee is considered a covered employee. 

                                   10 

                                                               Publication 420 (8/15) 

               • Services performed by a student enrolled and regularly attending 
                classes for a school, college, or university (including a student nurse 
                performing part-time services for nominal earnings at a hospital as an 
                incidental part of his or her training). 
               
               • Services performed by an individual who is subject to foreign social 
                security tax under an international social security agreement 
                (totalization agreement). 
               
               • Services performed by a nonresident alien individual, temporarily in 
                the United States as a non-immigrant under subparagraph F, J, M, or 
                Q of section 101(a)(15) of the Immigration and Nationality Act, if the 
                service is performed to carry out the purpose for which the individual 
                was admitted to the United States. 
               
               • Services performed by a student, scholar, trainee, teacher, etc., as a 
                nonresident alien holding an F-1, J-1, M-1, or Q-1 visa. 
               
               • Services performed by an individual on or in connection with a foreign 
                vessel or aircraft (not an American vessel or aircraft), if (1) the 
                individual is employed on or in connection with such vessel or aircraft 
                when outside the United States, and (2) the individual is not a citizen 
                of the United States or the employer is not an American employer. 
               
              In addition, under section 1402 of the IRC, income from certain 
              employment is treated as income from a trade or business and is reported 
              by an individual on federal Schedule SE, Self Employment Tax. 
              Accordingly, the income is included in the individual’s computation of net 
              earnings from self-employment and therefore, is not included in the 
              employer’s payroll expense for purposes of computing the MCTMT. (These 
              individuals may be subject to the MCTMT based on net earnings from self-
              employment; see page 16.) 
               
              Types of employment treated as a trade or business under section 1402 of 
              the IRC include but are not limited to: 
               
               • Qualified services performed by a minister, a member of a religious 
                order who has not taken a vow of poverty, or a Christian Science 
                practitioner or reader .
               • Services performed by an employee for a church or church-controlled 
                organization that has filed federal Form 8274, Certification by 
                Churches and Qualified Church-Controlled Organizations Electing 
                Exemption From Employer Social Security and Medicare Taxes.  
               • Services performed by a United States citizen employed by a foreign 
                government, the United Nations, or other international organization.  
               
 MCTMT rates  The MCTMT is imposed on the total payroll expense for all covered 
              employees for each calendar quarter at the following rates: 
               
                                11 

Publication 420 (8/15) 

                         If the payroll expense for the calendar quarter is: The MCTMT rate is: 
                                                                              
                         Over $312,500, but not over $375,000                .11% 
                         Over $375,000, but not over $437,500                .23% 
                         Over $437,500                                       .34% 
                         
 Computation of the     A professional employer organization (PEO), as defined in section 916 of 
 MCTMT for              the Labor Law, is considered the employer of record with respect to the 
 professional           employees of its clients and of its own organization. Therefore, the PEO is 
 employer               liable for the MCTMT due, if any, for each of its clients and for itself.  
 organizations           
                        For each calendar quarter, a PEO will determine its MCTMT liability, if any, 
                        using the following method:  
                         
                          1.  Determine a separate quarterly payroll expense for each client and 
                             for itself. 
                         
                          2.  Multiply each payroll expense determined in step  1by the applicable 
                             MCTMT rate for that expense amount. 
                         
                          3.  Add together the MCTMT amounts computed in step  2    to determine 
                             the total MCTMT liability for the calendar quarter. 
                         
                        For more information, see TSB-M-12(2)MCTMT, Computation of the 
                        Metropolitan Commuter Transportation Mobility Tax for Professional 
                        Employer Organizations.  
                         
 Prohibition from       An employer is prohibited from deducting from the wages or compensation 
 deducting MCTMT        of an employee any amount that represents all or any portion of MCTMT 
 from employees’        that the employer is required to pay. 
 wages or 
 compensation 
                         
 Quarterly filing       An employer must file a quarterly return and pay any MCTMT due for a 
                        calendar quarter in which the employer: 
 requirements and 
                         
 payment of the           • has a payroll expense for all covered employees that exceeds 
 MCTMT                     $312,500 for the calendar quarter; 
                          • has made any MCTMT payments during the calendar quarter; or 
                          • has an MCTMT overpayment that is carried over from a previous 
                           quarter.  
                         
                        Note: An employer must file a quarterly MCTMT return to request a refund 
                        of an overpayment. However, an employer may request the overpayment 
                        be credited to the next quarter if an MCTMT liability is anticipated in the 
                        next quarter. 
                         
                        An employer who does not meet any of the above conditions for a calendar 
                        quarter is not required to file an MCTMT return for that calendar quarter. 
                         
                                         12 

                                                                             Publication 420 (8/15) 

                        Quarterly MCTMT returns must be filed and any MCTMT due must be paid 
                        for each calendar quarter by the last day of the month following the end of 
                        the quarter as follows: 
                         
                          Quarter                                   Due Date 
                                                                     
                          January 1 to March 31                     April 30 
                          April 1 to June 30                        July 31 
                          July 1 to September 30                    October 31 
                          October 1 to December 31                  January 31 
                         
                        When a due date falls on a Saturday, Sunday, or legal holiday, an 
                        employer is permitted to file and pay on the next business day. No 
                        extensions of time to file or pay the MCTMT are allowed for employers.  
                         
                        MCTMT payments – The method and due dates for remitting MCTMT 
                        payments depend on whether or not the employer is required to or elects to 
                        participate in the PrompTax program for New York State withholding tax 
                        purposes (see Employers not required or electing to participate in the 
                        PrompTax program and PrompTax filers below). 
                         
                        MCTMT payments cannot be combined with payments of 
                        New York State withholding tax or unemployment insurance 
                        contributions.  
                         
 Employers not          An employer that is not required and does not elect to participate in the 
 required or electing   PrompTax program must report and pay the MCTMT quarterly by either of 
 to participate in the  the following methods: 
 PrompTax program        
                         • Web File and pay through the Tax Department Web site. (To Web File 
                          you must create an Online Services business account.) 
                         
                         • File paper Form MTA-305, Employer’s Quarterly Metropolitan 
                          Commuter Transportation Mobility Tax Return, and pay by check or 
                          money order.  
                         
 PrompTax filers        MCTMT payments – An employer that is required to participate in the 
                        PrompTax program for New York State withholding tax purposes is 
                        required to make payments of the MCTMT on the same dates its 
                        withholding tax payments are made under the PrompTax program. 
                        However, the employer must submit a separate MCTMT PrompTax 
                        payment. A payment of MCTMT cannot be combined with a withholding tax 
                        payment. 
                         
                        If an employer is not required to enroll in the PrompTax program for 
                        withholding tax purposes but does so voluntarily, the employer is not 
                        required to make MCTMT payments through the PrompTax program. 
                        However, an employer may elect to do so .If an employer elects to make 
                        MCTMT payments through the PrompTax program, the employer must 
                        make its MCTMT payments on the same date its PrompTax withholding 
                        payments are made. If an employer chooses not to use the PrompTax 
                        program for the MCTMT, the employer must report and pay the MCTMT 

                                            13 

Publication 420 (8/15) 

                       quarterly as described inEmployers not required or electing to participate in 
                       the PrompTax program above. 
                        
                       For more information on the MCTMT PrompTax program, visit the Tax 
                       Department Web site. 
                        
                       Computing MCTMT PrompTax payments – An employer participating in 
                       the PrompTax program should compute its MCTMT PrompTax payment by 
                       multiplying the payroll expense for the payroll period covered by the 
                       payment by the tax rate that will apply to the payroll expense for the 
                       calendar quarter. However, since PrompTax payments are often due prior 
                       to the end of a calendar quarter, certain PrompTax filers may not be able to 
                       determine whether they will be subject to the MCTMT for the quarter, or 
                       which MCTMT rate will apply. Accordingly, the following Tax Department 
                       policy applies for MCTMT PrompTax filers. Employers who follow this 
                       policy will not be subject to any penalties for underpayment of MCTMT 
                       PrompTax payments. 
                        
                        • Employers may use their previous quarter’s payroll expense to 
                         determine if they expect to be subject to the MCTMT and if they must 
                         make MCTMT PrompTax payments in the current quarter. Therefore, 
                         employers whose payroll expense in the previous calendar quarter did 
                         not exceed $312,500 are not required to make MCTMT PrompTax 
                         payments in the current quarter.  
                        
                         However, employers who did not make MCTMT PrompTax payments 
                         during the current quarter because their previous quarter’s payroll 
                         expense did not exceed $312,500, and whose actual payroll expense 
                         for the current quarter exceeds $312,500, must compute and pay the 
                         tax due with their quarterly return. 
                        
                        • Employers whose payroll expense exceeded $312,500 in the previous 
                         quarter and who must make MCTMT PrompTax payments in the 
                         current quarter may use the MCTMT rate (see MCTMT rates on 
                         page 11) that applied to their payroll expense for that previous quarter 
                         to compute the MCTMT PrompTax payments due.  
                        
                         At the end of the calendar quarter, employers must compute their 
                         actual MCTMT liability using the rate that applies to their actual payroll 
                         expense for that quarter. Any unpaid tax must be remitted with the 
                         quarterly return. If a quarterly MCTMT return results in an 
                         overpayment made through PrompTax, the employer may request a 
                         refund or have the overpayment credited to the next quarter. 
                        
                       A PEO and a common pay agent will separately apply the above policy for 
                       each client and for its own organization to determine its MCTMT PrompTax 
                       payment amount. 
                        
                       Quarterly MCTMT returns – An employer participating in the PrompTax 
                       program must file its quarterly MCTMT returns (see Quarterly filing 
                       requirements and payment of the MCTMT on page 12) by either of the 
                       following methods: 

                                          14 

                                                                           Publication 420 (8/15) 

                   • Web File and, if applicable, pay any additional MCTMT tax due 
                    through the Tax Department Web site. (To Web File you must create 
                    an Online Services business account.) 
                  
                   • File paper Form MTA-305, Employer’s Quarterly Metropolitan 
                    Commuter Transportation Mobility Tax Return, and if applicable, pay 
                    any additional MCTMT due by check or money order.  
                  
 Penalties and   Employers who file an MCTMT return and/or pay the tax after the due date 
                 are subject to penalties and interest. These penalties may include, but are 
 interest 
                 not limited to, the late-filing, late-payment, and failure-to-file penalties. In 
                 addition, interest will be charged on any MCTMT that is not paid on or 
                 before the payment due date. 
                  
 Collection of   The Tax Department will keep all or part of an employer’s overpayment of 
                 the MCTMT if the employer owes: 
 debts from an 
                  
 overpayment of    • a past-due legally enforceable debt to a New York State agency,  
 MCTMT             • a New York City tax warrant judgment debt,  
                   • a past-due legally enforceable debt to the Internal Revenue Service 
                    (IRS), or 
                   • a past-due legally enforceable debt to another state, provided that 
                    state has entered into a reciprocal agreement with New York State.  
                  
                 The department will refund or apply as an overpayment any amount that 
                 exceeds the debt. 
                  
                 A New York State agency includes any state department, board, bureau, 
                 division, commission, committee, public authority, public benefit 
                 corporation, council, office, or other entity performing a governmental or 
                 proprietary function for the state or a social services district. 
                  
                 If you have any questions about a past-due legally enforceable debt to the 
                 IRS, to another state, or to a New York State agency, contact the IRS, the 
                 other state, or the New York State agency. 
                  
                 For information relating to a New York City tax warrant judgment debt, call 
                 (212) 440-5487. 
                  
                 For New York State tax liabilities or New York City or Yonkers personal 
                 income tax liabilities, call (518) 457-5434 or write to:  
                  
                    NYS TAX DEPARTMENT  
                    CIVIL ENFORCEMENT DIVISION  
                    W A  HARRIMAN CAMPUS  
                    ALBANY NY 12227-0841 
                  
 Amending        If an error is discovered after filing an MCTMT return, an employer must file 
                 an amended MCTMT return. 
 MCTMT returns 
                  
                 Generally, an amended return must be filed within three years of the date 
                 the original return was filed or within two years of the date the tax was paid, 

                                   15 

Publication 420 (8/15) 

                        whichever is later. (A return filed before the due date is considered filed on 
                        the due date.) An employer should not file an amended MCTMT return 
                        unless an original return has been filed. 
                         
                        Federal audit changes – If the Internal Revenue Service (IRS) makes a 
                        change to an item used to calculate the amount an employer must include 
                        in the payroll expense subject to MCTMT, the employer must report this 
                        change to the New York State Tax Department within 90 days after the final 
                        federal determination of the change by filing an amended MCTMT return. 
                         
                        To amend a previously filed MCTMT return, the employer must complete a 
                        new return for that period. The amended return can be Web filed through 
                        the Tax Department Web site (if the period is still available to Web file) or 
                        by filing a new paper return for that period. The employer must check the 
                        Amended return box, complete the entire return (correct the appropriate 
                        lines with the new information), and recompute the MCTMT liability. 
                         
                        If an amended MCTMT return results in an overpayment, the employer may 
                        request a refund or have the overpayment credited to the next quarter. 
                         
 Treatment of the       When preparing New York State tax returns, any deduction permitted for 
                        federal income tax purposes for the MCTMT must be added back to 
 MCTMT on 
                        income, and any refund of the MCTMT must be subtracted from income. 
 New York State         These additions and subtractions must be made in computing the 
 tax returns            New York State taxes imposed by Articles 9-A, 13, 22, and 33 of the Tax 
                        Law (the corporation franchise tax, the tax on unrelated business income, 
                        the personal income tax, and the insurance franchise tax, respectively); and 
                        sections 11-602 and 11-641 of the Administrative Code of the City of 
                        New York (the general corporation tax and the bank tax).  
                         
                        A partnership must provide each partner with the partner’s share of the 
                        addition or subtraction modifications described above. For more 
                        information, see the instructions for the tax return being filed. 
 
III. Individuals with net earnings from self-employment 
 
 General                Individuals who have net earnings from self-employment allocated to the 
                        MCTD are subject to the MCTMT. However, if your total net earnings from 
                        self-employment allocated to the MCTD are $50,000 or less for the tax 
                        year, no MCTMT is due.  
                         
                        For purposes of the MCTMT, self-employed individuals include: 
                         
                         • Sole proprietors 
                         • Partners in partnerships 
                         • Members of limited liability companies (LLCs) that are treated as 
                          partnerships for federal income tax purposes (hereafter, members are 
                          referred to as partners) 
                         • Single-member LLCs that are treated as disregarded entities (sole 
                          proprietorships) for federal income tax purposes 
                         
                                      16 

                                                       Publication 420 (8/15) 

              If you have net earnings from self-employment allocated to the MCTD from 
              more than one business or partnership, you must use the total of all your 
              net earnings from self-employment allocated to the MCTD for purposes of 
              the $50,000 threshold and to compute the tax. Additionally, the threshold 
              and the tax must be computed on an individual basis, even though you may 
              file a joint personal income tax return. 
               
              If you have employees, you may also be subject to the MCTMT as an 
              employer (see Employers on page 6). 
               
              Note: For purposes of the MCTMT, a statutory employee is considered an 
              employee. Therefore the MCTMT is paid by the employer. 
               
 Definitions  The following definitions apply to the MCTMT for self-employed individuals: 
               
               • Net earnings from self-employment means your net earnings from 
                 self-employment as defined under section 1402(a) of the Internal 
                 Revenue Code (IRC).  
               
                 Note: Section 1402(b)(1) defines self-employment income subject to 
                 social security taxes. However, in computing the amount of net 
                 earnings from self-employment subject to the MCTMT, 
                 section 1402(b), including the annual limitation on the amount of net 
                 earnings from self-employment subject to social security tax under 
                 section 1402(b)(1), does not apply. Generally, your net earnings from 
                 self-employment for purposes of the MCTMT is the amount reported 
                 on federal Schedule SE (Form 1040), Self-Employment Tax, 
                 Section A or Section B depending on which section you are required 
                 to complete. However, see Net earnings from self-employment – 
                 Special situations on page 18. 
               
               • Net earnings from self-employment allocated to the MCTD means 
                 your net earnings from self-employment that are attributable to a 
                 business carried on within the MCTD.  
               
               • Business activity is carried on in the MCTD if you have, maintain, 
                 operate, or occupy desk space, an office, a shop, a store, a 
                 warehouse, a factory, an agency, or other place located in the MCTD 
                 where your business matters are systematically and regularly carried 
                 on. Similarly, business activity is carried on outside of the MCTD if you 
                 have, maintain, operate, or occupy desk space, an office, a shop, a 
                 store, a warehouse, a factory, an agency, or other place located 
                 outside the MCTD where your business matters are systematically 
                 and regularly carried on. 
               
                 If you do not have, maintain, operate, or occupy desk space, an 
                 office, a shop, a store, a warehouse, a factory, an agency, or other 
                 place located in or out of the MCTD, business is carried on within the 
                 MCTD if activities in connection with your business are conducted 
                 within the MCTD with a fair measure of permanency and continuity 
               
                              17 

Publication 420 (8/15) 

 Net earnings             
 from self-
 employment – 
 Special 
 situations 
                         
 Nonresident aliens     If you are a nonresident alien, you are exempt from federal self-
                        employment taxes under section 1402(b) of the IRC. However, since 
                        section 1402(b) does not apply to the MCTMT, nonresident aliens will be 
                        subject to the MCTMT if they have more than $50,000 of net earnings from 
                        self-employment allocated to the MCTD for the tax year.  
                         
                        In this instance, for purposes of the $50,000 threshold and in computing 
                        your MCTMT liability, you must compute your net earnings from 
                        self-employment allocated to the MCTD as if you were subject to federal 
                        self-employment tax. 
                         
 Certain church         If you are a church employee and you are required to pay federal 
 employees              self-employment tax, you are subject to the MCTMT if your net earnings 
                        from self-employment allocated to the MCTD are more than $50,000 for the 
                        tax year. If you are a church employee and you are not subject to federal 
                        self-employment tax, you are not subject to the MCTMT. 
                         
 Members of the         If you are a member of the clergy or a Christian Science practitioner or 
 clergy and Christian   reader and you are required to pay federal self-employment tax, you are 
 Science                subject to the MCTMT if your net earnings from self-employment allocated 
 practitioners          to the MCTD are more than $50,000 for the tax year. If you are a member 
                        of the clergy or a Christian Science practitioner or reader and you are not 
                        subject to federal self-employment tax, you are not subject to the MCTMT. 
                         
 Allocation of net      If all of your business activity is carried on within the MCTD, all of your net 
                        earnings from self-employment are allocated to the MCTD. If you carry on 
 earnings from 
                        business activities both in and outside of the MCTD, only a portion of your 
 self-employment 
                        net earnings from self-employment are allocated to the MCTD.  
                         
                        If you have net earnings from self-employment from activity both in and 
                        outside of the MCTD, you must allocate those net earnings for purposes of: 
                         
                          1.  determining whether or not the annual threshold has been met, and 
                         
                          2.  computing the amount of MCTMT due.  
                         
                        Allocation is done using the same rules that apply for purposes of the 
                        allocation of business income earned in and out of New York State under 
                        the personal income tax rules. Accordingly, if you keep books and records 
                        that fairly and equitably show net earnings from self-employment from 
                        business activity in the MCTD, you may compute the amount to be 
                        allocated to the MCTD from those books and records.  
                         
                        If your books and records do not fairly and equitably show the net earnings 
                        from self-employment in the MCTD, you must allocate to the MCTD the 

                          18 

                                                                    Publication 420 (8/15) 

            amount of your net earnings from self-employment using the formula 
            method (business allocation percentage) or another method that has been 
            authorized by the New York State Commissioner of Taxation and Finance. 
             
            The amount to be allocated to the MCTD using the formula method is that 
            part of total net earnings from self-employment that results from multiplying 
            total net earnings by the average of a property percentage, a payroll 
            percentage, and a gross income percentage. For more information, see the 
            instructions for the personal income tax return you are filing.  
             
            Partners or members in a partnership, LLP, or LLC will need to obtain 
            allocation information, if applicable, from the partnership, LLP, or LLC. For 
            more information, seeSpecial rules for partnerships and partners on 
            page 22. 
             
 Tax rate   The MCTMT is imposed at a rate of .34% of your total net earnings from 
            self-employment allocated to the MCTD for the tax year. 
             
 Estimated  Individuals who will owe any MCTMT for the tax year must make estimated 
            MCTMT payments.  
 MCTMT 
             
 payments 
            Estimated MCTMT payments are due quarterly on the same dates 
            specified for payments of estimated personal income tax: April 15, June 15, 
            September 15, and January 15. In addition, the department requires 
            payments of estimated MCTMT and payments of estimated personal 
            income tax be combined (single payment), if applicable. 
             
            Generally, no extensions of time to make estimated tax payments are 
            allowed. However, if your spouse died within 30 days before the April 15 
            due date of your first estimated tax installment, you qualify for a 90-day 
            extension of time to pay that installment (see the instructions for 
            Form IT-2105). This extension does not apply to any other estimated tax 
            installment for the tax year in which your spouse died. 
             
            You can estimate and pay all of your estimated MCTMT with the first 
            payment or pay it in four equal installments. If you are a nonresident 
            partner in a partnership, your partnership may make estimated MCTMT 
            payments on your behalf. For more information, see Special rules for 
            partnerships and partners on page 22. 
             
            Married taxpayers – If both spouses owe MCTMT, each spouse must 
            calculate his or her estimated MCTMT liability separately, and each spouse 
            must establish a separate estimated tax account. 
             
            You must estimate your net earnings from self-employment for the tax year. 
            This is the amount you expect to enter in Section A or Section B of federal 
            Schedule SE (Form 1040), Self-Employment Tax. If your net earnings from 
            self-employment are not subject to federal self-employment tax (for 
            example, nonresident aliens), use federal Schedule SE (Form 1040) to 
            compute your net earnings from self-employment as if they were subject to 
            the tax. However, only your total net earnings from self-employment 
             
                              19 

Publication 420 (8/15) 

                       allocated to the MCTD are to be considered when computing the amount of 
                       estimated MCTMT due for the tax year.  

                       If you have net earnings from self-employment allocated to the MCTD from 
                       more than one business or partnership, you must use the total of all your 
                       net earnings from self-employment allocated to the MCTD. If you have net 
                       earnings from self-employment from business activity carried on both in 
                       and out of the MCTD, see the worksheets in the instructions for 
                       Form IT-2105, Estimated Tax Payment Voucher for Individuals.  

                       To estimate the amount of MCTMT due, you must first estimate your net 
                       earnings from self-employment for the tax year allocated to the MCTD and 
                       multiply that amount by .34% (.0034). The result may then be divided by 
                       four, and that amount is the quarterly estimated MCTMT payment due.  

                       You have the option to pay your estimated MCTMT payments by either of 
                       the following methods: 

                       • Web File and pay through the Tax Department Web site. (To Web File
                         you must create an Online Services account.)

                       • File paper Form IT-2105, Estimated Tax Payment Voucher for
                         Individuals, and pay by check or money order.

Penalty for            To avoid a penalty for underpayment of estimated MCTMT for the tax year, 
underpayment of        your payments must be made on time and your total amount of estimated 
estimated MCTMT        MCTMT payment(s) must be: 

                       • at least 90% (66 2/3% for farmers and fishermen) of the total MCTMT
                         due for the tax year; or

                       • 100% of the MCTMT shown on the MCTMT return for the prior tax
                         year (110% of that amount if you are not a farmer or a fisherman and
                         your net earnings from self-employment allocated to the MCTD as
                         shown on the prior year’s MCTMT return are more than $150,000).
                         You must have filed an MCTMT return for the prior year for a full
                         12-month year.

                       In addition, if your income varied during the year because, for example, you 
                       received unexpected income in November or later, you may still be able to 
                       avoid a penalty by using the Annualized income installment worksheet in 
                       the instructions for Form IT-2105.9, Underpayment of Estimated Tax by 
                       Individuals and Fiduciaries  . For more information, see the instructions for 
                       Form IT-2105.9. 

Reporting annual       You must report annual MCTMT information on your personal income tax 
                       return if you meet either of the following conditions: 
MCTMT 
information 
                       • Your total net earnings from self-employment allocated to the MCTD
                         exceed $50,000 for the tax year. (The $50,000 threshold must be
                         computed on an individual basis, even if you file a joint personal
                         income tax return.)

                                            20 

                                                                               Publication 420 (8/15) 

                          • You want to claim a refund of any estimated MCTMT paid by you or 
                             on your behalf. 
                        
                       You must report the actual amount of the MCTMT due for the tax year. If 
                       you owe any additional MCTMT, it must be remitted with your personal 
                       income tax return. An overpayment of tax will be refunded, or you may elect 
                       to have the overpayment carried forward as a credit toward your next year’s 
                       estimated tax.  
                        
 Penalties and         If you file your personal income tax return late or pay the tax after the due 
                       date, you may be subject to late-filing and/or late-payment penalties.  
 interest 
                        
                       You may also be subject to an underpayment penalty if you did not pay 
                       enough estimated tax (see Penalty for underpayment of estimated MCTMT 
                       on page 20).  
                        
                       Interest will be charged on any tax that is not remitted on or before the 
                       payment due date. 
                        
 Overpayments of       If you have an overpayment of tax,    you may request a refund or credit the 
                       overpayment to the next tax year. 
 tax 
                        
                       In addition, if you had an overpayment of tax for the previous tax year, you 
                       may need to know the overpayment amount from federal Form 1099-G, 
                       Certain Government Payments, to complete your federal personal income 
                       tax return for the current tax year. This amount can be obtained on our Web 
                       site (www.tax.ny.gov) through ourOnline Services, or by calling 
                       (518) 485-2392.  
                        
 Collections of debts  The Tax Department will keep all or part of your overpayment under the 
 from an               following circumstances: 
 overpayment of tax     
                          • you owe a New York State tax liability or a New York City or Yonkers 
                             personal income tax liability;  
                          • you owe a past-due support or a past-due legally enforceable debt to 
                             the Internal Revenue Service (IRS) or a New York State agency, or to 
                             another state; 
                          • you defaulted on a governmental education loan, state university, or 
                             city university loan; or  
                          • you owe a New York City tax warrant judgment debt.  
                        
                       A New York State agency includes any state department, board, bureau, 
                       division, commission, committee, public authority, public benefit 
                       corporation, council, office, or other entity performing a governmental or 
                       proprietary function for the state or a social services district. 
                        
                       If you have any questions about a past-due legally enforceable debt to the 
                       IRS, to another state, or to a New York State agency, contact the IRS, the 
                       other state, or the New York State agency. 
                        
                       For information relating to a New York City tax warrant judgment debt, call 
                       (212) 440-5487. 

                                            21 

Publication 420 (8/15) 

                        For New York State tax liabilities or New York City or Yonkers personal 
                        income tax liabilities, call (518) 457-5434; or write to:  
                         
                                NYS TAX DEPARTMENT 
                                CIVIL ENFORCEMENT DIVISION  
                                W A HARRIMAN CAMPUS  
                                ALBANY NY 12227-0841 
                         
 Amending               If you realize you have made an error in computing your MCTMT liability 
                        after filing your New York State personal income tax return, you must report 
 MCTMT 
                        the correct amount of MCTMT due to the New York State Tax Department 
 information 
                        by filing an amended personal income tax return.  
                         
                        Generally, an amended return must be filed within three years of the date 
                        the original return was filed or within two years of the date the tax was paid, 
                        whichever is later. (A return filed before the due date is considered filed on 
                        the due date.)  
                         
                        Do not file an amended return unless you have already filed your original 
                        return. 
                         
                        Note: If the IRS makes a change to your federal income tax return, you 
                        must report this change by filing an amended New York State personal 
                        income tax return with the Tax Department within 90 days of the final 
                        federal determination of the change. 
                         
 Treatment of the       Deductions permitted for federal income tax purposes for the MCTMT are 
                        not allowed in computing your New York State and New York City personal 
 MCTMT on 
                        income taxes. Additionally, any amount of refund, credit, or overpayment of 
 New York State         the MCTMT must be subtracted from your federal income when computing 
 personal income        your New York adjusted gross income to the extent included in your federal 
 tax returns            adjusted gross income. 
                         
                        For more information, see the instructions for the income tax return you are 
                        filing. 
 
IV.  Special rules for partnerships and partners 
 
 General                For purposes of this section, partnerships, including LLPs and LLCs treated 
                        as partnerships for federal income tax purposes, will be collectively referred 
                        to as partnerships; and partners and members will be collectively referred 
                        to as partners.  
                         
                        If a partnership is doing business within the MCTD, each partner may be 
                        subject to the MCTMT based on his or her share of the partnership’s net 
                        earnings from self-employment allocated to the MCTD.  
                         
                        The partnership must provide the actual amount of net earnings from 
                        self-employment allocated to the MCTD (without regard to the $50,000 
                        threshold) so that the partner can determine the actual amount of his or her 
                        MCTMT due. 

                                         22 

                                                                                                                      Publication 420 (8/15) 

                                                 For detailed information on allocating partnership income from business 
                                                 carried on both in and out of the MCTD, see the instructions for the 
                                                 New York allocation schedule in Form IT-204-I, Instructions for 
                                                 Form IT-204, and replace New York State with MCTD.  
                                                  
                                                 If a partnership has employees, the partnership may be subject to the 
                                                 MCTMT as an employer (see Employers on page 6). 
                                                  
 Net earnings                                    Net earnings from self-employment means an individual’s net earnings from 
                                                 self-employment as defined under section 1402(a) of the Internal Revenue 
 from 
                                                 Code (IRC). 
 self-employment    
                                                  
                                                 A partner’s distributive share of net earnings from self-employment 
                                                 allocated to the MCTD will be determined based on the partnership’s 
                                                 allocation to the MCTD (determined by the formula method or books and 
                                                 records). In the case of a tiered partnership, the allocated amount will be 
                                                 based on each partnership’s allocation to the MCTD using the same 
                                                 look-through approach as used for personal income tax purposes. 
                                                  
 Guaranteed                                      Nonresident alien partners are not exempt from the MCTMT even though 
 payments to                                     they may be exempt from federal self-employment taxes (see Nonresident 
 nonresident alien                               aliens on page 18). 
 partners                                         
                                                 Certain guaranteed payments received by nonresident alien partners are 
                                                 not included in computing the partner’s federal and New York State income 
                                                 taxes. However, these payments are not excluded from net earnings from 
                                                 self-employment as defined under section 1402(a) of the IRC. Therefore, 
                                                 guaranteed payments to nonresident alien partners may be subject to the 
                                                 MCTMT. The amount allocated to the MCTD will be determined based on 
                                                 the partnership’s business allocation to the MCTD. 
                                                  
 Estimated                                       Partnerships that do business within the MCTD are required to make 
                                                 estimated MCTMT payments on behalf of partners who are nonresident 
 MCTMT                                                                      1
                                                 individuals of New York State  except in the following circumstances: 
 payments made                                    
 on behalf of                                     • The estimated MCTMT required to be paid for the tax year by the 
 nonresident                                        partnership on the partner’s behalf is $300 or less.  
 individual                                       
 partners                                           Note: While the partnership is not required to make estimated 
                                                    MCTMT payments on a nonresident individual’s behalf because the 
                                                    MCTMT required to be paid is $300 or less, the individual partner is 
                                                    still required to make individual estimated payments if he or she is 
                                                    liable for any amount of MCTMT. 
                                                  
                                                  • The partner submits a completed exemption form to the partnership: 
                                                  
                                                       • For tax year 2015, partners must useForm MTA-405-E, Certificate 
                                                         of Exemption from Partnership Estimated Metropolitan Commuter 
                                                         Transportation Mobility Tax Paid on Behalf of New York 
                                                         Nonresident Individual Partners, or 
                                                 
1
  Partnerships may also be required to make estimated personal income tax payments on behalf of nonresident partners. 

                                                                     23 

Publication 420 (8/15) 

                             • For tax years after 2015, partners must use Form IT-2658-E, 
                               Certificate of Exemption from Partnership or New York 
                               S Corporation Estimated Tax Paid on Behalf of Nonresident 
                               Individual Partners and Shareholders. 
                         
                         • The partnership is authorized to file a personal income tax group 
                           return and the partner has elected to be included on the group return 
                           (see Form IT-203-GR, Group Return for Nonresident Partners    , and 
                           the instructions for Form IT-203-GR). 
                         
                           Note: If the partnership plans to file a group return and a partner 
                           elects to be included, the partnership must make the partner’s 
                           estimated MCTMT payments, personal income tax payments (if 
                           applicable), and file the New York State group income tax return. 
                         
                        A partnership required to make estimated MCTMT payments on behalf of a 
                        nonresident individual partner must file Form IT-2658, Report of Estimated 
                        Tax for Nonresident Individual Partners and Shareholders, attach 
                        Form IT-2658-MTA, Attachment to Form IT-2658, and pay by check or 
                        money order.  
                         
                        The partnership can pay the nonresident partner’s entire estimated MCTMT 
                        with the first payment or pay it in four equal installments (see Estimated 
                        MCTMT payments on page 19). 
                         
                        When a partnership makes an estimated MCTMT payment on behalf of a 
                        nonresident partner, it is treated as a payment of tax made by the partner. 
                        The partnership must issue a statement to the nonresident partner showing 
                        the amount of the individual estimated MCTMT payment made on the 
                        partner’s behalf. This statement must be furnished to the partner within 
                        30 days after the payment is made. There is no specific form for this 
                        notification process.  
                         
                        If a partnership has made any individual estimated MCTMT payments on 
                        behalf of a nonresident partner, the date an estimated tax payment was 
                        made and the amount must also be shown on the partner’s Form IT-204-IP. 
                         
                        The partner can take credit for any payments made on his or her behalf by 
                        the partnership when the partner files his or her New York State personal 
                        income tax return.  
                         
                        Note: If a nonresident partner has elected to be included in the 
                        partnership’s group return for nonresident partners, no entry should appear 
                        on the nonresident partner’s Form IT-204-IP with regard to estimated 
                        MCTMT paid on his or her behalf. In addition, the partner is not required to 
                        file a New York State nonresident income tax return. 
                         
 Form IT-203-GR,        For tax years beginning on or after January 1, 2015, annual MCTMT 
                        information will be reported on Form IT-203-GR, Group Return for 
 Group Return for 
                        Nonresident Partners.  
 Nonresident             
 Partners                

                                            24 

                                                                               Publication 420 (8/15) 

                   A partnership that has any income derived from or connected with 
                   New York sources may be granted approval to file a group return on behalf 
                   of its qualified electing nonresident individual partners.  
                    
                   The group return is considered a group of individual personal income tax 
                   returns that meet the New York State and Yonkers return filing 
                   requirements. Accordingly, if a qualified partner elects to participate in the 
                   group return, the partner is not required to file an individual New York State 
                   or Yonkers personal income tax return or nonresident earnings tax return 
                   for the tax year.  
                    
                   Note: Resident partners and grantor trusts are not eligible partners for 
                   personal income tax groups and cannot be included on Form IT-203-GR. 
                    
 Group             Any overpayment of tax shown on Form IT-203-GR cannot be refunded. An 
 overpayments of   overpayment of tax in one tax year must be applied to the group estimated 
 MCTMT             tax account for the following year. 
                    
 Amending MCTMT    An amended group return must be filed if an error in the original group 
 information on a  return is discovered that changes any items used in calculating net 
 group return      earnings from self-employment allocated to the MCTD reported on the 
                   original group return.  
                    
                   Generally, an amended return must be filed within three years of the date 
                   the original return was filed or within two years of the date the tax was paid, 
                   whichever is later. (A return filed before the due date is considered filed on 
                   the due date.)  
                    
                   Do not file an amended return unless an original return has already been 
                   filed. 
                    
                   Note: An amended group return must be filed if an amended federal return 
                   is filed by the partnership, or if a federal audit of the partnership changes 
                   any of the partnership items of income, gain, loss, or deduction reported on 
                   the original group return. An amended group return must be filed within 90 
                   days of the date the federal amended partnership return is filed, or, in the 
                   case of a federal audit, within 90 days after the final determination of the 
                   change.  
                    
                                      25 

New York State Tax Department

Online Services

Create an Online Services account  
 and log in to:

•  make payments

•  file certain returns and other tax forms

•  view your account and filing information

•  change your address

•  receive email notifications

•  respond to bills and notices

Access is available 24 hours a day, 7 days
a week (except for scheduled maintenance).

 www.tax.ny.gov

Publication 420
(8/15)

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