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Taxation of Employee Benefits: New York

Taxation of Employee Benefits requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

  • Salary Deferrals to Internal Revenue Code § 125 Cafeteria plans and § 401(k) plans are generally not subject to state income tax withholding. See Salary Deferrals to § 125 Cafeteria Plans and § 401(k) Plans.
  • Same-sex marriage is recognized in New York. The value of health insurance benefits provided to an employee's same-sex spouse, and/or their dependents, is not taxable. Civil unions and domestic patnerships are not recognized. The value of health insurance benefits provided to an employee's same-sex civil union partner or domestic partner, and/or their dependents, is subject to income tax withholding. See Same-Sex Couple Health Insurance Benefits.