Tax Release Notes 202601-2

The following tax updates have been made and are now available.

 

Millennium users can sync with MPAY for the changes. Please remember to restart your Process Servers after performing a SyncUP to MPAY.

 

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Please Note: The following items are under development and will be included in future tax releases:

 

E-File Updates:

 

  • 2025 940 Federal Unemployment Annual Schema Update

    • New schema version 2025v4.0. This version includes major updates to support Direct Deposit elements, along with new data elements for IP Address, Device ID, and Vendor Control Number. A separate communication with more information will be sent shortly.

  • 2025 944 Annual Federal Tax Return Schema Update

    • New schema version 2025v4.0. This version includes major updates to support Direct Deposit elements, along with new data elements for IP Address, Device ID, and Vendor Control Number. A separate communication with more information will be sent shortly.

 

Form Updates:

 

  • 2025 1099-NEC and 1099-MISC

    • Forms are being updated to correctly display state withholding in scenarios where a recipient receives both a 1099-NEC and a 1099-MISC with state withholding.

  • 2025 Hawaii Annual Transmittal of Income Tax Withheld

    • Form reference number update

 

Rate Updates:

 

  • 2026 North Dakota Withholding Tax Table

  • 2026 Ohio New Local School District Taxes

  • 2026 Ohio Withholding Rate On Supplemental Wages

  • 2026 Pennsylvania Local Keystone Collections Group Rates

 

System Updates:

 

  • CalcW2 Update

    • Fix issue impacting employees who have OT-AL or OT-AL-Weighted earning types and contain a letter in their Employee ID.

 

The current planned release schedule can be viewed on our website and is subject to change.

 

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The current release includes the following changes:

 

Development Tags

 

Form Updates:

 

  • New Kentucky Local City of Walton Annual Return

  • New Kentucky Local City of Walton Quarterly Return

  • 2025 Nebraska Annual Reconciliation of Income Tax Withheld

  • 2025 Montana Annual W-2 1099 Withholding Tax Reconciliation

 

Tax Updates:

 

  • 2026 Maryland Local Withholding Tax Rates

  • 2026 Michigan Withholding Tax Tables

  • 2026 Oregon Metro Supportive Housing Services Tax

  • 2026 Oregon Withholding Tax Table

  • 2026 Vermont Withholding Tax Tables

  • 2026 Virgin Islands Unemployment Wage Base

 

Pension Updates:

 

  • 2026 Deferred Compensation Memo Limits

 

System Updates:

 

  • Kentucky Boone Annual E-file Update

 

Tax Development Tags

 

Form: New Kentucky Local City of Walton Annual Return (M3-2875)

 

A generic form has been added for the annual filing of the Kentucky local City of Walton (KY-WAL1) tax effective 01-01-2026.

 

Form: New Kentucky Local City of Walton Quarterly Return (M3-2874)

 

A generic form has been added for the quarterly filing of the Kentucky local City of Walton (KY-WAL1) tax effective 01-01-2026.

 

Form: 2025 Nebraska Annual Reconciliation of Income Tax Withheld (M3-2964)

 

The Nebraska Reconciliation of Income Tax Withheld, form W-3N, has been updated.

 

Please download 25NEW3N1.pcl file from the SFTP site under "Tax Forms\Tax Forms for Tax Release 202601-2\" and place the file in your local M3 Tax Forms folder prior to generating the return.

 

Form: 2025 Montana Annual W-2 1099 Withholding Tax Reconciliation (M3-2960)

 

This form was previously included in last week 202501-1 Tax Release; however, the pcl files were not included at that time.

 

Please download 25MTMW31.pcl and 25MTMW32.pcl file from the SFTP site under "Tax Forms\Tax Forms for Tax Release 202601-2\" and place the file in your local M3 Tax Forms folder prior to generating the return.

 

Tax: 2026 Maryland Local Withholding Tax Rates (M3-2999)

 

The Maryland local withholding tax rates have been updated effective 01-01-2026.

 

Allegany, MD (MD-ALL1)

 

Rate: 3.2%

 

Kent, MD (MD-KEN1)

 

Rate: 3.3%

 

Tax: 2026 Michigan Withholding Tax Tables (M3-2990)

 

The Michigan withholding tax tables have been updated effective 01-01-2026.

 

Tax: 2026 Oregon Metro Supportive Housing Services Tax (M3-2989)

 

The Oregon Metro Supportive Housing Services Tax (OR-POR1) has been updated for employees who earn more than $200,000.00 annually, effective 01-01-2026.

 

Tax: 2026 Oregon Withholding Tax Table (M3-2991)

 

The Oregon withholding tax tables have been updated effective 01-01-2026.

 

Tax: 2026 Vermont Withholding Tax Tables (M3-2992)

 

The Vermont withholding tax tables have been updated effective 01-01-2026.

 

Tax: 2026 Virgin Islands Unemployment Wage Base (M3-2996)

 

The Virgin Islands unemployment wage base limit has been updated to $32,100.00 effective 01-01-2026.

 

Pension: 2026 Deferred Compensation Memo Limits (M3-2998)

 

The 2026 annual compensation limits on the below memo codes have been updated to $360,000.00 effective 01-01-2026.

 

Memo401kMatch

 

Memo403bMatch

 

MemoERMatch

 

MemoR401kMatch

 

MemoR403bMatch

 

MemoRSimplMatch

 

MemoSBRSMatch

 

MemoSBSimpMatch

 

MemoSi401kMatch

 

MemoSimpleMatch

 

System: Kentucky Boone Annual E-file Update (M3-3001)

 

The KYBOONEANNEFILE task code will no longer appear on the Client Copies tab.

 

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