As a small business owner, you need to stay on top of your state-specific employer responsibilities. Because each state has different laws, you may have more tax responsibilities than an employer in another state.
If you are an employer in Massachusetts, you might be required to pay the employer medical assistance contribution (EMAC) tax.
What is the EMAC tax?
The employer medical assistance contribution tax is an employer-only tax Massachusetts employers with six or more employees pay. EMAC is a percentage of each employee’s wages. Massachusetts employers must file and report their quarterly EMAC tax liability to the Department of Unemployment Assistance (DUA).
As a Massachusetts employer, you must pay EMAC tax in addition to your state unemployment insurance (UI) tax liability and Workforce Training Fund Program contributions. EMAC tax contributions fund health insurance programs in Massachusetts, not unemployment or workforce training programs.
Even if you offer employer-sponsored health insurance to your employees, you must pay the employer medical assistance contribution tax if you have six or more employees.
When you submit your employment and wage detail report to the DUA, they will determine if you must pay EMAC tax. If you are required to pay the tax, the DUA will send you a notice with your rate.
You do not need to pay EMAC tax during a quarter where your average employee count is less than six. And, employers are exempt from paying EMAC tax for up to three years after becoming subject to Massachusetts’ unemployment insurance law.
EMAC Contribution Rates
Your EMAC contribution rate depends on how long you have been subject to the unemployment insurance law. However, new employers are not subject to the employer medical assistance contribution rate for the first 3 years of business. Massachusetts uses a tiered system to give newer employers a reduced EMAC rate.
- Years 1-3 – New employers that become subject to EMAC or UHI are exempt from this tax for the first three years.
- Year 4 – Employers in their 4th year of being subject previously will pay 0.12% (0.0012).
- Year 5 – Employers in their 5th year of being subject to EMAC previously will pay a rate of 0.24% (0.0024).
- Years 6+ – Employers in their 6th year or more of being subject to UHI previously will pay an EMAC rate of 0.34% (0.0034).
The contribution rate is a percentage of the first $15,000 of each employee’s wages. After an employee earns $15,000, do not contribute EMAC tax on their wages.
How to pay EMAC taxes
After submitting your employment and wage detail report, the DUA tells you which taxes you are responsible for. Then, the DUA calculates how much you owe for EMAC tax, state unemployment insurance, and workforce training.
Pay EMAC taxes through your unemployment insurance online account.
You can make payments to the DUA via paper check, ACH debit, or ACH credit.
Filing and payment due dates
File a wage detail report with the Department of Unemployment Assistance and remit your liability.
You must file your wage detail report and pay EMAC tax, state unemployment tax, and workforce training contributions by 3 p.m. of the quarterly due dates:
- Quarter 1: April 30
- Quarter 2: July 31
- Quarter 3: October 31
- Quarter 4: January 31
The DUA charges late payers interest on unpaid liabilities at an annual rate of 12%.
For more information about the Employer Medical Assistance Contribution (EMAC) please visit the Massachusetts’ government website.
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This is not intended as legal advice; for more information, please click here.