Massachusetts Employer Medical Assistance Contribution (EMAC)

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Massachusetts Employer Medical Assistance Contribution (EMAC)

Background

In the Commonwealth of Massachusetts, employers who have been in business for at least three years and have an average of at least six employees per quarter are subject to paying Employer Medical Assistance Contributions (EMAC), previously known as Unemployment Health Insurance (UHI).  These contributions subsidize health care to low-income residents. Each employer is required to pay this contribution on the first $15,000 of each employee’s wages during the calendar year. There are also reporting requirements for this contribution. If you are a Full Service Payroll customer, this tax will be deposited and filed for you. For further details about EMAC, see the Massachusetts Labor and Workforce Development Website.

To set up your EMAC rate in Patriot Software

According to the Massachusetts Labor Website, the contribution rate depends on the number of years the employer has been in business:

  • Year 1, 2 and 3: EXEMPT.  New employers are exempt from paying the UHI/EMAC tax for the first three years.  If your business is exempt from this contribution, go to Settings > Payroll Settings > Tax Exemptions by State and select “Exempt” under “EMAC.”  You do not need to fill in the UHI/EMAC tax rate.  Otherwise, leave EMAC as Not Exempt.

For all other years, go to Settings > Payroll Settings > State Unemployment Rates, find the “Massachusetts Employer Medical Assistance Contributions” and click “Edit.”

  • Year 4:  Employers in their third year of being subject to UHI previously will pay an EMAC rate of 0.12%.
  • Year 5:  Employers in their fourth year of being subject to UHI previously will pay an EMAC rate of 0.24%
  • Year 6 and more:  Employers in their fifth year or more of being subject to UHI previously will pay an EMAC rate of 0.34%.

Similar to unemployment tax rates, it is your responsibility to keep these tax rates updated in the software.

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