Under new regulations effective January 1, 2009, any pass-through entity that maintains an office or engages in business in Massachusetts must withhold tax on a quarterly basis from each member’s share of the entity’s Massachusetts source income, unless either the entity itself is exempt from this requirement or the member timely certifies that it is exempt. This withholding obligation applies regardless of whether the pass-through entity actually makes any distributions to its members.

Each quarterly withholding payment is due on or before the last day of the month following the close of each quarter of the entity’s taxable year. For a calendar year pass-through entity, the deadline for the first quarterly withholding payment is April 30th.

Please see full alert for more information.