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  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE XXI LABOR AND INDUSTRIES
  • CHAPTER 151A UNEMPLOYMENT INSURANCE
  • Section 29E Notification to claimants; tax liability and withholding

Section 29E. (a) The deputy director shall notify in writing each individual who files a new initial claim for benefits under this chapter, at the time of filing such claim, that: (1) any payments of unemployment compensation as defined in section 85(b) of the Internal Revenue Code received under this chapter are subject to federal and state income tax; (2) receipt of such payments may require the individual to make quarterly estimated payments of federal and state income tax; and (3) the individual may elect, in accordance with the procedures prescribed by the commissioner, to have federal and state income tax deducted and withheld from such payments of unemployment compensation.

(b) If an individual has made an election in accordance with subsection (a) to have federal income tax deducted and withheld from such individual’s payments of unemployment compensation, the deputy director shall have an amount equal to 10 per cent of the amount payable to such individual under the provisions of subsection (a), (b) or (d) of section twenty-nine, whichever is applicable, including any amount payable under subsection (c) of said section twenty-nine, rounded to the next lower full dollar amount if it includes a fractional part of the dollar, deducted and withheld from any payment of unemployment compensation under this chapter.

(c) If an individual has made an election in accordance with subsection (a) to have state income tax deducted and withheld from such individual’s payments of unemployment compensation, the deputy director shall have an amount equal to the rate of tax specified in subsection (b) of section 4 of chapter 62 of the amount payable to such individual under the provisions of subsection (a), (b) or (d) of section twenty-nine, whichever is applicable, including any amount payable under subsection (c) of said section twenty-nine, rounded to the next lower full dollar amount if it includes a fractional part of a dollar, deducted and withheld from any payment of unemployment compensation under this chapter.

(d) Any amounts deducted and withheld under this section shall remain in the Unemployment Compensation Fund until transferred to the federal and state taxing authority.

(e) The deputy director shall allow any individual who has made an election in accordance with subsection (a) to change such election.

(f) The deputy director, with the approval of the director of the department of unemployment assistance, shall deduct and withhold any amounts under this section only after amounts are deducted and withheld for any overpayments of unemployment compensation, child support obligations or any other amounts required to be deducted and withheld under this chapter. Where the amount deductible under either subsection (b) or subsection (c) of this section is greater than the amount payable after applying all other deductions, the amount deductible shall not exceed such payable amount. The commissioner shall promulgate regulations, consistent with the provisions of the foregoing paragraph, establishing the priorities of amounts to be deducted and withheld under this section.

(g) The deputy director shall follow all procedures specified by the United States Department of Labor, the Federal Internal Revenue Service and the Massachusetts department of revenue pertaining to the deducting and withholding of income tax.

(h) Notwithstanding section forty-six of this chapter, the commissioner may disclose to the appropriate taxing authorities such information as necessary to carry out the purposes of this section.