With the new year underway, it is important to be aware of several updates to laws and policies that could impact the business climate. Multiple new laws and regulations pertaining to PFMLA, taxes, and FinCEN took effect at the start of the year.
Paid Family Medical Leave (PFML):
- Maximum weekly benefits under PFML are increased from $1,129.82 to $1,149.90 for 2024.
- Contribution rates have increased:
- Employers with 25 or more covered individuals will now need to pay 0.88 percent of eligible employee wages, up from 0.63 in 2023.
- Contribution rates at employers with fewer than 25 covered individuals rose from 0.318 percent up to 0.46 percent for 2024.
- State Resources:
Multiple provisions from the 2023 Massachusetts Tax Cuts legislation went into effect at the start of 2024, while additional changes will be made in 2025. The list below is not all encompassing of the reforms retroactive to January 1, 2023, please consult your tax professional for additional information and questions:
- Child Tax Credits: The tax law provides parents and caregivers $440 per dependent beginning on January 1, 2024, up from $310 per dependent in 2023, with no cap on the number of individuals that may be claimed.
- Joint Filing: Starting for tax years beginning on or after January 1, 2024, married couples must file a joint personal income tax return for any year in which they file a joint federal income tax return.
- Housing Development Incentive Program (HDIP): For tax years beginning on or after January 1, 2024, the annual cap is set at $30,000,000. The certified housing development tax credit is claimed on Schedule CMS.
- Single Sales Factor: Under the new law, the state is abandoning the three-factor test for determining sales tax for corporations which previously took into account (I) property (2) payroll and (3) sales. The transition to a single sales factor apportionment formula will begin on January 1, 2025.
- State Resource: 2023 Massachusetts Tax Cuts Legislation | Mass.gov
The Corporate Transparency Act: According to the Secretary of the State’s office, the reporting requirements under the federal Corporate Transparency Act (CTA) went into effect on January 1, 2024. Enacted in 2021, the CTA is intended to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud. The CTA establishes a beneficial ownership reporting requirement for corporations, limited liability companies, and other similar entities formed or registered to do business in the United States. Beneficial ownership reports must be filed with the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of Treasury.
- Beneficial Ownership Information (BOI) report deadlines:
- Domestic reporting companies and entities that are registered as foreign reporting companies formed prior to January 1, 2024 must file an initial report by January 1, 2025.
- Any domestic reporting company or any entity that becomes a foreign reporting company formed in 2024, must file a BOI report within 90 calendar days of either receiving actual notice that its formation has become effective or the secretary of state or similar office first providing public notice that it has been formed, whichever occurs first.
- Reporting companies formed or registered on or after January 1, 2025, will have 30 calendar days to file their initial BOI reports after receiving actual or public notice that the entity has been formed or registered, whichever occurs first.
- Entities required to report BOI:
- Domestic reporting companies are corporations, limited liability companies, and other entities that are formed by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe.
- Foreign reporting companies are corporations, limited liability companies, and other entities that are formed in a foreign country and are registered to do business in the United States or in any Tribal jurisdiction by submitting a document with the secretary of state or any similar office under the law of a U.S. state or Indian tribe.
- The CTA lists 23 categories of entities that are exempt from reporting. View the list of exemptions here.
- Many of the exempt categories are already subject to similar regulation such as banks, credit unions, tax-exempt entities, public utilities, and large operating companies.
- Information required to be reported to FinCEN:
- Company Information including: legal name, any trade name (DBA), address, taxpayer identification number
- Beneficial Owner Information including: legal name, date of birth, and residential street address, a unique identifying number from an acceptable identification document, the name of the state or jurisdiction that issued the acceptable identification document along with an image of the acceptable identification document.
- Company Applicant Information, if required: legal name, date of birth, and residential street address, a unique identifying number from an acceptable identification document, the name of the state or jurisdiction that issued the acceptable identification document along with an image of the acceptable identification document.
- Federal Resources:
- State Resource: Secretary of State Corporate Transparency Act Information
Minimum Wage/ Premium Pay: There is no change in 2024 when it comes to minimum wage and premium pay. 2023 marked the final set of increases as part of the 5-year Grand Bargain Legislation. Any future increased would need to be approved by the legislature or voters via a ballot question.
- The Commonwealth’s minimum wage remains at $15.00 an hour.
- The wage for tipped employees remains at $6.75 an hour.
- State Resource: Minimum wage and overtime information | Mass.gov