Employers: metropolitan commuter transportation mobility tax (MCTMT)

An employer is subject to the MCTMT if it:

• is required to withhold New York State income tax from wages; and
• has greater than $312,500 in payroll expense for covered employees across both zones of the Metropolitan Commuter Transportation District (MCTD) in any calendar quarter.

The tax rates in the two zones differ and are based on the employer’s payroll expense in the specific zone.

The following employers are not subject to the MCTMT:

• an agency or instrumentality of the United States;
  Note: For an employer to be an agency or instrumentality of the United States, there must be (1) a federal law specifically stating the employer is an agency or instrumentality of the United States, or (2) a decision in a federal court case which specifically states that the employer is an agency or instrumentality of the United States. 
• the United Nations;
• an interstate agency or public corporation created pursuant to an agreement or compact with another state or Canada;
• a federally chartered credit union;
• a household employer on wages paid to household employees; 
• any eligible educational institution including:
  • a public school district,
  • Board of Cooperative Educations Services (BOCES),
  • a public elementary or secondary school,
  • a school that serves students with disabilities of school age as defined in Article 85 or 89 of the Education Law,
  • a nonpublic elementary or secondary school that provides instruction in grade one or above, or
  • all public library systems [as defined by § 272(1) of the Education Law] and all public and free association libraries [as defined by § 253(2) of the Education Law] beginning with the first quarter of 2016.
• a local government employer whose covered employees are within MCTD Zone 2 (effective for quarters beginning on or after July 1, 2025). 

   A local government employer includes: 

• • a county, city, town, village, or any other political subdivision or civil division of the state,
  • a public improvement or special district,
  • a public authority, commission, community college, or public benefit corporation,
  • any other public corporation, agency, or instrumentality or unit of government which exercises governmental powers under the laws of the state, or
  • both the county and the sheriff, in the case of a sheriff's office in counties where the office is an elected position.

Calculating the tax

The MCTD is divided into two zones:

• Zone 1 includes the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, and Richmond (Staten Island).
• Zone 2 includes the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.

The MCTMT due for a calendar quarter is the sum of:

1. the payroll expense in the calendar quarter for all covered employees in Zone 1 multiplied by the applicable MCTMT rate from Table 1a or 1b below, and
2. the payroll expense in the calendar quarter for all covered employees in Zone 2 multiplied by the applicable MCTMT rate from Table 2a or 2b below.

Note: To be subject to the MCTMT for the quarter, the employer must have payroll expense in the entire MCTD greater than $312,500.

Table 1a: Zone 1 MCTMT for quarters beginning before July 1, 2025

 Calculating tax

Payroll expense attributable to Zone 1	MCTMT Rate
Over $0 but not over $375,000	0.11% (0.0011)
Over $375,000 but not over $437,500	0.23% (0.0023)
Over $437,500	0.60% (0.0060)

Table 1b: Zone 1 MCTMT for quarters beginning on or after July 1, 2025

 Calculating tax

Payroll expense attributable to Zone 1	MCTMT Rate
Over $0 but not over $375,000	0.055% (0.00055)
Over $375,000 but not over $437,500	0.115% (0.00115)
Over $437,500 but not over $2,500,000	0.60% (0.0060)
Over $2,500,000	0.895% (0.00895)

Important: Local government employers are not subject to the 0.895% rate for payroll expense in Zone 1 over $2,500,000.  Instead, they are subject to an MCTMT rate of 0.60% for payroll expense in Zone 1 that exceeds $2,500,000.

Table 2a: Zone 2 MCTMT for quarters beginning before July 1, 2025

 Calculating tax

Payroll expense attributable to Zone 2	MCTMT Rate
Over $0 but not over $375,000	0.11% (0.0011)
Over $375,000 but not over $437,500	0.23% (0.0023)
Over $437,500	0.34% (0.0034)

Table 2b: Zone 2 MCTMT for quarters beginning on or after July 1, 2025

 Calculating tax

Payroll expense attributable to Zone 2	MCTMT Rate
Over $0 but not over $375,000	0.055% (0.00055)
Over $375,000 but not over $437,500	0.115% (0.00115)
Over $437,500 but not over $2,500,000	0.34% (0.0034)
Over $2,500,000	0.635% (0.00635)

Important: Local government employers in Zone 2 are not subject to the MCTMT.

Example: An employer has payroll expense within the MCTD of $650,000. $450,000 of that payroll expense is attributable to Zone 1 and $200,000 of that payroll expense is attributable to Zone 2. The employer’s MCTMT liability is $2,810 ([$450,000 x 0.60%] + [$200,000 x 0.055%]).

PrompTax program participants who cannot calculate their quarterly payroll expense at the beginning of a calendar quarter should see Employers participating in the PrompTax program.

When to file and pay

Employers must file and pay for each calendar quarter as follows: 

 When to file and pay

Quarter	Due date*
January 1 through March 31	April 30
April 1 through June 30	July 31
July 1 through September 30	October 31
October 1 through December 31	January 31

*When the due date falls on a Saturday, Sunday, or legal holiday, an employer may file on the next business day.

• No extensions of time to file or pay the tax are allowed.
• Employers who are not subject to the MCTMT for a quarter, are not required to file a return for that quarter. If the employer becomes subject to the tax in a subsequent quarter, it must file a quarterly return and pay the tax due.
• Employers that made any MCTMT payments during the quarter, or have an overpayment carried over from a previous quarter, must file a quarterly return to request a refund (or credit to the next quarter if it anticipates owing MCTMT in that quarter).

How to file and pay

• File and pay online: Web File Form MTA-305, Employer's Quarterly Metropolitan Commuter Transportation Mobility Tax Return and pay directly from a bank account through our Online Services after a business account is created.
• You can also use the Tax Department's Online Services MCTMT Upload to file a return. See the file formatting instructions for how to format the file.
• MCTMT payments can be made using the PrompTax program if the employer is currently enrolled voluntarily in the PrompTax program to file New York State withholding tax. Employers required to participate in the PrompTax program for New York State withholding must make their MCTMT payments using the PrompTax program. See employers participating in the PrompTax program for details.
• File paper Form MTA-305, Employer's Quarterly Metropolitan Commuter Transportation Mobility Tax Return, and pay by check or money order.

For more information, see:

• Publication 420, Guide to the Metropolitan Commuter Transportation Mobility Tax
• MCTMT forms and instructions
• MCTMT TSB-Ms