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
The contribution rate is a contribution percentage employers must pay on the first $15,000 of each employee’s wages. After an employee earns $15,000, do not contribute EMAC tax on their wages.
Here’s what the effective EMAC rates look like after January 1, 2022:
- First three years. New employers that become subject to EMAC are exempt for the first three years.
- Year four. In their fourth year subject to EMAC, employers’ EMAC rate is 0.12%.
- Year five. In their fifth year subject to EMAC, employers’ EMAC rate is 0.24%
- Six or more years. In their sixth year subject to EMAC, employers have an EMAC rate of 0.34%. This rate will continue for all years after the sixth year.
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 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.
Need help calculating and withholding your EMAC tax? Patriot’s online payroll software has you covered. After you enter your employee information, our software will automatically calculate your EMAC tax contribution amounts. Get your free trial today!
This article is updated from its original publication date of September 26, 2018.
This is not intended as legal advice; for more information, please click here.
