START-UP NY: metropolitan commuter transportation mobility tax (MCTMT) exemption for employers

The metropolitan commuter transportation mobility tax (MCTMT) exemption eliminates the MCTMT on the payroll expense attributable to an approved business location within the Metropolitan Commuter Transportation District (MCTD) for 40 consecutive calendar quarters. The exemption begins with the calendar quarter during which the business locates in the tax-free NY area.

How to calculate the MCTMT

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.

Note: To be subject to the MCTMT for the quarter, the employer must have payroll expense in the entire MCTD greater than $312,500. If this threshold is exceeded, continue with Part 1 below.

Part 1:

Step 1: Calculate the total payroll expense for employees within Zone 1 of the MCTD. 

• Include all employees within Zone 1 of the MCTD, including those inside and outside the tax-free NY area. 
• Use this amount to determine the rate at which the tax is calculated (see Employers: MCTMT).

Step 2: Then subtract from the total payroll expense the amount of payroll expense from the tax-free NY area within Zone 1 of the MCTD.

Step 3: Multiply the amount in Step 2 by the rate determined in Step 1.

Example: Taxpayer A has payroll expense of $500,000 in Zone 1 of the MCTD of which $300,000 is payroll expense attributable to a tax-free NY area within Zone 1 of the MCTD. Since the payroll expense is over the threshold of $437,500 the applicable rate is 0.60%. Taxpayer A's MCTMT attributable to Zone 1 is $1,200 ($200,000 x 0.60%).

Part 2:

Step 1: Calculate the total payroll expense for employees within Zone 2 of the MCTD. 

• Include all employees within Zone 2 of the MCTD, including those inside and outside the tax-free NY area. 
• Use this amount to determine the rate at which the tax is calculated (see Employers: MCTMT).

Step 2: Then subtract from the total payroll expense the amount of payroll expense from the tax-free NY area within Zone 2 of the MCTD.

Step 3: Multiply the amount in Step 2 by the rate determined in Step 1.

Example: Taxpayer A has payroll expense of $500,000 in Zone 2 of the MCTD of which $300,000 is payroll expense attributable to a tax-free NY area within Zone 2 of the MCTD. Since the payroll expense is over the threshold of $437,500 the applicable rate is 0.34%. Taxpayer A's MCTMT attributable to Zone 2 is $680 ($200,000 x 0.34%).

Part 3:

Add the amount from Part 1, Step 3 to the amount from Part 2, Step 3. This is the total MCTMT due.

How to claim the exemption

You must have an Online Services account and Web File your quarterly MCTMT return. This will allow you to provide complete information to calculate your tax correctly.  

Web upload filers: You may not include START-UP NY businesses in upload files. You must separately Web File for those businesses.