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New York Publishes MTA Payroll Tax Protective Refund Claim Procedures

Refund claims for employers should be filed on or before November 2, 2012.

On October 17, the New York State Department of Taxation and Finance (Department) published guidance regarding the procedures for taxpayers to file protective refund claims under the New York State Metropolitan Commuter Transportation Mobility Tax (MTA Payroll Tax or MCTMT).[1] As discussed in our LawFlash, "Potential Refund Claims: New York MTA Payroll Tax Held Unconstitutional,"[2] the New York Supreme Court recently held that the MTA Payroll Tax violated the New York State Constitution.[3]

While litigation in this matter is expected to continue, taxpayers may file protective refund claims to prevent potential refunds from being time-barred by the statute of limitations in the event that the MTA Payroll Tax is ultimately determined to be unconstitutional. Based on the Department's guidance, refund claims should be filed on or before November 2, 2012, for employers and on or before April 30, 2013, for self-employed individuals.

Protective refund claims may be filed through the following methods: 1) an online services account, if a company has one; 2) an electronic form;[4] or 3) an automated telephone application, which is available at 518.485.2392. Partnerships may file one protective claim on behalf of all the qualified partners previously included on the partnership's group MCTMT return (Form MTA-505) using either an electronic form or an automated telephone application.

The protective refund claim applies to all prior and future MTA Payroll Tax filings. Taxpayers should not file amended returns in order to file the protective refund claims, and should continue to file and pay the MCTMT until further notice from the Department.

[1]. Read the Department's guidance here.

[2]. Read our October 3, 2012, LawFlash here.

[3]. See Mangano v. Silver, Index No. 14444/10 (N.Y. Sup. Ct. Aug. 22, 2012), available here.

[4]. View the electronic MCTMT Protective Claim form here.

Copyright © 2020 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume II, Number 293


About this Author

Mary Hevener, tax lawyer, Morgan Lewis

Mary B. “Handy” Hevener helps US and multinational enterprises minimize corporate payroll taxes and maximize benefits–related tax deductions. She focuses her practice on the tax treatment of employee and independent contractor benefits outside qualified retirement plans, including stock options and other stock-based compensation; executive income deferrals; golden parachutes; and fringe benefits that range from health and life insurance, to employee loans, cars, planes, and prizes.

William Colgin Jr., Corporate tax lawyer, Morgan Lewis

William F. Colgin Jr. primarily represents corporate taxpayers in complex civil tax controversies and tax litigation. Bill litigates in the US Tax Court, federal district courts, state courts, and appellate courts. He represents clients in Internal Revenue Service (IRS) examinations and appeals, and in similar proceedings before state taxing authorities. He began his tax litigation career as a trial attorney in the Tax Division of the US Department of Justice, representing the IRS.

Barton Bassett, Intellectual Property Lawyer, Morgan Lewis

Barton W. S. Bassett counsels Silicon Valley–based and global multinational technology companies on international tax planning for the outbound operations of US companies doing business abroad, and for the inbound operations of foreign companies seeking to do business within the United States. Barton advises clients on structuring mergers and acquisitions (M&A), internal restructurings and operations, joint ventures, external and internal financings, and transfer pricing matters, including the transfers and licenses of intellectual property (IP).