830 CMR, § 62C.55A.1

Current through Register 1536, December 6, 2024

Section 62C.55A.1 - Determination of Amount Exempt from Levy

(1)General. Under M.G.L. c. 62C, § 55A(a)(9) and (d), certain amounts payable to or received by a taxpayer as wages or salary for personal services or as income from other sources are exempt from levy. 830 CMR 62C.55A.1, describes what amount of wages, salary, and other income payable to or received by a taxpayer is eligible for the exemption from levy and describes how pay periods are determined. 830 CMR 62C.55A.1, defines the term "dependent" for purposes of determining amounts exempt from levy, and explains the procedure for the taxpayer to claim any dependent exemptions. Finally, 830 CMR 62C.55A.1, explains how the payor should submit to the Commissioner amounts not exempt from levy.

(2)Definitions. For purposes of 830 CMR 62C.55A.1, the following words have the following meanings, unless the context otherwise requires:

Commissioner, the Commissioner of Revenue or the Commissioner's designee.

Day, for purposes of 830 CMR 62C.55A.1(5) and (6), the term "day" does not include Saturdays, Sundays or a legal holiday within the meaning of M.G.L. c. 4, § 7 and Section 7503 of the Internal Revenue Code in effect on July 1, 1983.

Dependent, a person described in M.G.L. c. 62C, § 55A(d)(1)(B) and 830 CMR 62C.55A.1(5), and a person defined in Section 152(a)(1) through (a)(9) of the Internal Revenue Code in effect on July 1, 1983.

Payor, the employer or other person obligated to pay the taxpayer wages, salary, and other income and upon whom the Commissioner's levy is served with respect to such wages, salary, and other income.

Pay period, a period of time for which any wages, salary, and other income are payable to or received by a taxpayer. The rules for determination of a pay period are found in 830 CMR 62C.55A.1(4).

Taxpayer, any person whose wages, salary, and other income are subject to levy by the Commissioner.

Wages, salary, and other income, all income from whatever source derived, including, but not limited to, the items specified in Section 61 of the Internal Revenue Code in effect on July 1, 1983, and including, but not limited to, the items specified in M.G.L. c. 62, § 2(1), but excluding any amounts listed as being exempt from levy under M.G.L. c. 62C, § 55A(a)(1) through (a)(9).

(3)Determination of Exempt Amount. Out of amounts payable to the taxpayer as wages, salary, and other income for each pay period described in 830 CMR 62C.55A.1(4), the following amounts are exempt from levy:

(a) If the pay period is daily: $15 personal exemption, plus $5 for each person who is claimed as a dependent pursuant to 830 CMR 62C.55A.1(5).

(b) If the pay period is weekly: $75 personal exemption, plus $25 for each person who is claimed as a dependent pursuant to 830 CMR 62C.55A.1(5).

(c) If the pay period is once every two weeks: $150 personal exemption, plus $50 for each person who is claimed as a dependent pursuant to 830 CMR 62C.55A.1(5).

(d) If the pay period is twice in a calendar month: $162.50 personal exemption, plus $54.17 for each person who is claimed as a dependent pursuant to 830 CMR 62C.55A.1(5).

(e) If the pay period is monthly: $325 personal exemption, plus $108.33 for each person who is claimed as a dependent pursuant to 830 CMR 62C.55A.1(5).

(f) If the pay period is not daily, weekly, once every two weeks, twice in a calendar month, or monthly: a proportionate amount determined by multiplying the sum of an annual personal exemption of $3,900, plus an annual dependent exemption of $1,300 for each person who is claimed as a dependent pursuant to 830 CMR 62C.55A.1(5), by a fraction the numerator of which is the number of hours, days, weeks, or months, whichever is applicable, in the pay period, and the denominator of which is the corresponding number of hours, days, weeks, or months in a calendar year.

Example: Taxpayer A, an employee of the X corporation, is paid wages of $600 every three weeks and has two dependent children. The amount of wages exempt from levy for taxpayer A for each three week pay period is:

(3,900 + (2 x 1,300)) x 3 weeks = $375.00

52 weeks

(4)Determination of Pay Period. For purposes of determining the amount of wages, salary, and other income exempt from levy under M.G.L. c. 62C, s. 55A(a)(9) and (d), the pay period shall be determined as follows:

(a)Regularly Used Pay Periods. A regularly used pay period is an established period of time, regularly used by a payor, for which wages, salary, and other income are payable to or received by a taxpayer. Regularly used pay periods include, but are not limited to, pay periods which are daily, weekly, once every two weeks, twice in a calendar month, and monthly.

(b)Amounts Paid on Irregular but Recurrent Basis. In the case of wages, salary, and other income paid to the taxpayer on an irregular but recurrent basis, the first day of the taxpayer's pay period is the day following the day upon which the wages, salary, and other income were last paid to the taxpayer. The last day of the pay period is the day upon which the current payment becomes payable to the taxpayer. However, where amounts are paid to the taxpayer on an irregular but recurrent basis and more than 60 days lapse between the current payment and the last payment, the current payment will be deemed a one-time payment. See 830 CMR 62C.55A.1(4)(c).

(c)One-time Payment. If a taxpayer is paid wages, salary, and other income on a one-time basis, the taxpayer's pay period is deemed to be weekly, and the deemed one-week pay period ends on the day of payment. See 830 CMR 62C.55A.1(4)(b).

(5)Dependent Exemption.

(a)Dependent Defined. For purposes of M.G.L. c. 62C, § 55A(d)(1)(B) and 830 CMR 62C.55A.1(3), a person is a dependent of the taxpayer for any pay period of the taxpayer, if

1. Over half of that person's support for the pay period was received from the taxpayer, and

2. The person either is the taxpayer's spouse or bears, on the last day of the pay period, a relationship to the taxpayer specified in Section 152(a)(1) through (a)(9) (relating to definition of dependent) of the Internal Revenue Code in effect on July 1, 1983, and

3. The person is not the taxpayer's minor child with respect to whom amounts are exempt from levy under M.G.L. c. 62C, § 55A(a)(8) (relating to exemption from levy for judgments for support of minor children) at any time during the pay period.

For purposes of 830 CMR 62C.55A.1(5)(a)2., "pay period" should be substituted for "taxable year" each place it appears in I.R.C. § 152(a)(9).

(b)Claim for Dependent Exemption. No amount will be exempt as a dependent exemption unless the payor submits a claim for dependent exemption. A claim for dependent exemption shall be made by either completion of a DOR Statement of Exemptions Form, or a written statement that:

(i) identifies by name and by relationship to the taxpayer each person for whom a dependent exemption is claimed,

(ii) is signed by the taxpayer, and

(iii) contains a declaration that it is made under the penalties of perjury.

(c)Delivery of Statement of Exemptions to Taxpayer. Generally, the Commissioner will deliver to the payor a Statement of Exemptions upon which the taxpayer claims any dependent exemptions. The Statement of Exemptions will accompany the DOR Notice of Levy Form. The payor must promptly deliver the Statement of Exemptions to the taxpayer.

(d)Submission of Statement of Exemptions to Payor. The taxpayer must submit the Statement of Exemptions to the payor no later than the third day before the last day of the pay period for which the dependent exemptions are claimed. If the levy is made on or after the third day before the last day of the pay period, the taxpayer must submit the Statement of Exemptions to the payor no later than two days after the day the taxpayer receives the form. The payor may accept a Statement of Exemptions at any time as long as payment to the Commissioner is made in accordance with 830 CMR 62C.55A.1(6).

(e)Failure to Submit a Statement of Exemptions. If the taxpayer does not submit a Statement of Exemptions within the time specified in 830 CMR 62C.55A.1(5)(d), the taxpayer is entitled only to a personal exemption for any pay period.

(f)Effect of Statement of Exemptions. A Statement of Exemptions is effective for all pay periods until the taxpayer submits to the payor an amended Statement of Exemptions, or until the liability is paid in full and a release of levy is issued, or until the levy becomes unenforceable by reason of lapse of time.

(g)Validity of Statement of Exemptions. The Commissioner has the authority at any time to determine the validity of the Statement of Exemptions. The Commissioner may determine the proper number of dependent exemptions to which a taxpayer is entitled. Upon notification by the Commissioner, the payor shall use the number of dependent exemptions determined by the Commissioner.

(6)Payment to Commissioner of Amounts Not Exempt from Levy.

(a)General Rule. The payor is required to make payment to the Commissioner on the date the payor is otherwise obligated to pay the taxpayer.

(b)Delayed Payment in Certain Cases. If the levy is served on the payor on or after the third day before the last day of the pay period, the payor is required to make payment to the Commissioner no later than five days after the day the levy is served on the payor.

830 CMR, § 62C.55A.1