What Is the MTA Tax? Zones, Rates, and 2026 Deadlines

The MTA tax, formally the Metropolitan Commuter Transportation Mobility Tax (MCTMT), is a New York payroll tax on employers and self-employed people doing business inside the twelve-county Metropolitan Commuter Transportation District (MCTD). Revenue goes to the Metropolitan Transportation Authority to fund subways, buses, and commuter rail. Rates changed for quarters beginning on or after July 1, 2025, so every quarter in 2026 falls under the newer schedule.¹

Where the Tax Applies

The MCTD is split into two zones. Zone 1 is the five boroughs: New York (Manhattan), Kings (Brooklyn), Bronx, Queens, and Richmond (Staten Island). Zone 2 is the surrounding suburban counties: Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester. If none of your business activity touches those twelve counties, the MCTMT does not apply.¹

Who Owes It

Employers

An employer owes the MCTMT when it is required to withhold New York State income tax from wages and its total payroll expense for covered employees across the entire MCTD exceeds $312,500 in a calendar quarter. The threshold looks at combined payroll across both zones, not each zone separately. An employer that stays at or below $312,500 every quarter owes nothing.¹

You cannot deduct or pass any portion of the tax through to employee wages. It is the employer’s obligation.

Self-Employed People

If your net earnings from self-employment within the MCTD exceed $50,000 for the tax year, you owe the MCTMT. Net earnings are generally pulled from your federal Schedule C, or Schedule K-1 for partners and LLC members treated as partners. The $50,000 threshold has not changed through 2026.²

Partnerships and LLCs taxed as partnerships do not pay at the entity level. Each partner or member calculates their own liability on their share of the entity’s MCTD net earnings, and the partnership must supply Zone 1 and Zone 2 allocation percentages so partners know what they owe in each zone.²

Who Is Exempt

Some employers are outside the MCTMT regardless of payroll:

Federal agencies and instrumentalities of the United States government.
The United Nations, and interstate agencies or public corporations created under agreements with other states or Canada.
Public school districts, BOCES, public elementary and secondary schools, schools serving students with disabilities, nonpublic elementary and secondary schools providing instruction in grade one or above, and public library systems and free association libraries.
Local government employers in Zone 2 whose covered employees are entirely within Zone 2, effective for quarters beginning on or after July 1, 2025.¹

If you qualify, keep documentation on file in case the Tax Department asks.

Employer Rates for 2026

Rates apply to the payroll expense attributable to each zone, not to combined payroll, and the schedule is tiered.

Zone 1 (Five Boroughs)

Up to $375,000: 0.055%
Over $375,000 but not over $437,500: 0.115%
Over $437,500 but not over $2,500,000: 0.60%
Over $2,500,000: 0.895%

Local government employers in Zone 1 cap at the 0.60% rate even above $2,500,000 and do not pay the top 0.895% tier.¹

Zone 2 (Suburban Counties)

Up to $375,000: 0.055%
Over $375,000 but not over $437,500: 0.115%
Over $437,500 but not over $2,500,000: 0.34%
Over $2,500,000: 0.635%

Zone 2 is no longer a flat rate. It uses the same tier structure as Zone 1 at lower percentages.¹

When Payroll Spans Both Zones

Calculate each zone’s tax separately and add the results. In the Tax Department’s own example, an employer with $650,000 of total MCTD payroll ($450,000 Zone 1, $200,000 Zone 2) owes $2,810: $450,000 × 0.60% = $2,700, plus $200,000 × 0.055% = $110.¹

Self-Employed Rates

Self-employed filers above the $50,000 threshold also pay by zone, with partnerships and LLCs providing zone allocation percentages. The rate for earnings in the five boroughs is higher than the rate for earnings in the surrounding counties, and self-employed rates have been updated several times recently, so confirm the current figure for your zone on the Tax Department’s MCTMT page before filing.²

Forms and 2026 Deadlines

Employers file Form MTA-305 each quarter through the Tax Department’s online system.³ For 2026:

Q4 2025 (Oct–Dec): January 20, 2026
Q1 2026 (Jan–Mar): April 30, 2026
Q2 2026 (Apr–Jun): July 31, 2026
Q3 2026 (Jul–Sep): November 2, 2026⁴

Employers whose aggregate withholding tax exceeded $100,000 in the prior year must participate in PrompTax, which shifts payments to an electronic schedule tied to payroll dates instead of the standard quarterly cycle.⁵

Self-employed individuals file Form MTA-6 annually. Calendar-year filers owe it by April 15, 2026, the same date as the personal income tax return.⁴ You can Web File MTA-6 through the Tax Department’s online portal or submit a paper return.⁶ Fiscal-year filers have until the 30th day of the fourth month after their tax year closes.

Late Filing and Late Payment

Missing a deadline triggers penalties and daily compounding interest:

Late filing without a valid extension: 5% of tax due per month or partial month, capped at 25%. If the return is more than 60 days late, the minimum penalty is $100 or the total tax due, whichever is less.
Late payment: 0.5% of the unpaid amount per month or partial month, also capped at 25%. The Tax Department may waive this penalty for reasonable cause.
Interest: charged from the original due date on any unpaid balance, compounded daily, at a rate adjusted quarterly.⁷

Because the late-filing penalty is far larger than the late-payment penalty, file on time even if you cannot pay in full. That one step cuts your penalty exposure substantially.

Fixing a Return After Filing

To correct an error, submit a new return for the same period with the “Amended return” box checked. Employers use a new Form MTA-305 with corrected payroll figures and recomputed tax; self-employed filers do the same on Form MTA-6. If the IRS changes an amount that feeds into your MCTMT payroll expense, you have 90 days from the IRS’s final determination to file the amendment.⁸ Otherwise, amended returns are generally due within three years of the original filing date or two years from the date the tax was paid, whichever is later. Keep payroll records and filing confirmations at least that long.⁹

1
Department of Taxation and Finance. Employers: Metropolitan Commuter Transportation Mobility Tax (MCTMT)
2
Department of Taxation and Finance. Metropolitan Commuter Transportation Mobility Tax (MCTMT) Individual Definitions
3
Department of Taxation and Finance. Metropolitan Commuter Transportation Mobility Tax
4
Tax.NY.gov. 2026 Tax Filing Dates
5
Tax.NY.gov. PrompTax Program
6
New York State Department of Taxation and Finance. MTA-6 Web File
7
Tax.NY.gov. Interest and Penalties
8
Tax.NY.gov. Instructions for Form MTA-305 Employer’s Quarterly Metropolitan Commuter Transportation Mobility Tax Return
9
Tax.NY.Gov. Guide to the Metropolitan Commuter Transportation Mobility Tax