Section 2: Duty of employer; manner of computation; duty of commissioner
Section 2. Every employer making payment to employees on or after February fifteenth, nineteen hundred and fifty-nine, of wages subject to tax under chapter sixty-two shall deduct and withhold a tax upon such wages in accordance with tables prepared by the commissioner which tax so withheld shall be substantially equivalent to the tax imposed by said chapter sixty-two. The commissioner may permit the use of accounting machines to calculate the proper amount to be deducted and withheld from such wages; provided, that such calculation produces substantially the tax required by said tables.
If wages are paid with respect to a period which is not a pay-roll period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous pay-roll period containing a number of days, including Sundays and holidays, equal to the number of days in the period with respect to which such wages are paid. In any case in which wages are paid by an employer without regard to any pay-roll period or other period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous pay-roll period containing a number of days equal to the number of days, including Sundays and holidays, which have elapsed since the date of the last payment of such wages by such employer during the calendar year, or the date of commencement of employment with such employer during such year, or January first of such year, whichever is the later.
In determining the amount to be deducted and withheld under this section, the wages may, at the election of the employer, be computed to the nearest dollar.
The commissioner may, by regulation, authorize employers to estimate the wages which will be paid to any employee in any quarter of the calendar year, to determine the amount to be deducted and withheld upon each payment of wages to such employee during such quarter as if the appropriate average of the wages so estimated constituted the actual wages paid, and to deduct and withhold upon any payment of wages to such employee during such quarter such amount as may be necessary to adjust the amount actually deducted and withheld upon the wages of such employee during such quarter to the amount that would be required to be deducted and withheld during such quarter if the pay-roll period of the employee was quarterly.
The commissioner may, if he deems such action necessary for the protection of the revenue of the commonwealth, require persons other than employers: (1) to deduct and withhold taxes from payments made by such persons to residents, nonresidents and part-year residents of the commonwealth or, in the case of S corporations or entities treated as partnerships, from the distributive shares of income of such persons attributable to their shareholders or members; (2) to file withholding returns as prescribed by the commissioner; and (3) to pay over to the commissioner, or to a depositary designated by the commissioner, the taxes so required to be deducted and withheld; provided, however, that nothing in this paragraph shall authorize the commissioner to require any corporation, foundation, organization or institution that is exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code, as amended and in effect for the taxable year, to withhold taxes from persons who are not employees, except where the payments made by the exempt person for a particular performance or other event exceed $10,000. Any person other than an employer required to withhold and deduct taxes under this paragraph shall be treated as an employer for purposes of sections 5 through 12.
The commissioner may provide by regulation, under such conditions and to such extent as he deems proper, for withholding in addition to that otherwise required under this section in cases in which the employer and the employee agree to such additional withholding. Such additional withholding shall for all purposes be considered a tax required to be deducted and withheld under this chapter.
Every person, including the United States, the commonwealth or any other state, or any political subdivision or instrumentality of the foregoing, making any payment of lottery winnings which are subject to tax under chapter 62 and which are subject to withholding under section 3402 of the Internal Revenue Code, without the exception for keno and bingo in subsections (q)(5) and (r) of said section 3402 of the Internal Revenue Code, shall deduct and withhold from such payment an amount equal to 5 per cent of such payment, except that such withholding for purposes of this chapter shall apply to payments of winnings of $600 or greater notwithstanding any contrary provision of the Internal Revenue Code. For the purposes of this chapter and chapter 62C, such payment of winnings shall be treated as if it were wages paid by an employer to an employee. Every person who is to receive a payment of winnings which is subject to withholding under this section shall furnish to the person making such payment a statement, made under penalties of perjury, containing the name, address and taxpayer identification number of the person receiving the payment and of each person entitled to any portion of such payment.
A person at a gaming establishment licensed in accordance with chapter 23K making a payment of winnings of $1,200 or more from slot machine play shall file a form W–2G with respect to such payment. A person making a payment of winnings of $600 or more from pari-mutuel wagering shall file a form W–2G with respect to such payment if the proceeds are at least 300 times as large as the amount wagered. For purposes of this section, in determining whether winnings equal or exceed the $1,200 or $600 amounts, the amount of winnings shall not be reduced by the amount wagered. A person making a payment of winnings from wagering at a gaming establishment or from pari-mutuel wagering which are subject to tax under chapter 62 and subject to withholding under section 3402 of the Internal Revenue Code shall deduct and withhold an amount equal to 5 per cent of such payment. A person who is to receive a payment of winnings which are subject to withholding shall furnish the person making such payment a statement, made under the penalties of perjury, containing the name, address, and taxpayer identification number of the person receiving the payment and of each person entitled to any portion of that payment. Notwithstanding any general or special law to the contrary, any review or transmission of information required to be done by a gaming licensee relative to the disbursement of cash or prize winnings shall be administered consistent with this paragraph and based upon real-time information.
If, at the time an unemployment compensation payment, as defined in section 85(b) of the Internal Revenue Code, is made to any person, an election by such person is in effect under clause (3) of subsection (a) and under subsection (c) of section twenty-nine E of chapter one hundred and fifty-one A to subject such payment to voluntary withholding of personal income tax, then for purposes of this chapter such payment shall be treated as if it were a payment of wages by an employer to an employee. The amount to be deducted and withheld under this chapter from such payments shall be the amount set forth in said subsection (c) of said section twenty-nine E.