Withholding Taxes: New York
The below content should be reviewed in conjunction with the in-depth federal coverage of this topic provided above.
Author: Vicki M. Lambert, The Payroll Advisor
- All wages paid to New York State (NYS) residents are subject to withholding, even when earned outside of the state. An employee is a NYS resident for income tax purposes if certain criteria are met. NYS personal income tax must also be withheld from wages paid to NYS nonresident employees for services performed in NYS. See Withholding on Residents, Nonresidents and Expatriates.
- NYS employers may determine withholding using Form IT-2104, Employee's Withholding Allowance Certificate, in lieu of the equivalent federal Form W-4. Form IT-2104 should be used if the number of an employee's withholding allowances, or the additional dollar amount requested to be withheld for NYS, is different than it is for federal purposes. See Employee's Withholding Allowance Certificate.
- Withholding on supplemental wage payments, such as bonuses, is calculated differently depending on whether the payments are made simultaneously with, or separate from, regular wages. See Supplemental Wages.
- Each year employers must provide copies of federal Form W-2, Wage and Tax Statement, to each employee from whom any amount of NYS income tax was withheld, or would have been withheld under the approved tables and other methods if the employee had claimed no more than one withholding allowance. A different due date applies to terminated employees. See Form W-2 Reporting.
- NYS requires employers to keep the same records for state income tax purposes as is required to be kept for federal income tax purposes. Employers are also required to keep all records and information returns available for review by the Department of Taxation and Finance (DOTF). See Recordkeeping Requirements.
- All wages paid to a New York City (NYC) resident are subject to withholding for the NYC Resident Income Tax in addition to the NYS income tax, even if the employee earned the wages outside NYC. Employers are responsible for ensuring that the correct amount of tax is withheld from employees' wages. See New York City Resident Income Tax.
- All wages paid to City of Yonkers residents are subject to withholding for the Yonkers Resident Tax Surcharge, even if the services were performed outside Yonkers. Individuals who reside in Yonkers and certain areas of Bronxville, Scarsdale and Tuckahoe are subject to Yonkers resident income tax withholding. See Yonkers Resident Tax Surcharge.
- The City of Yonkers nonresident earnings tax is withheld on wages paid to Yonkers nonresident employees for services performed in Yonkers. See Yonkers Nonresident Earnings Tax.
- Certain employers engaged in business within the Metropolitan Commuter Transportation District (MCTD) of NewYork must pay the Metropolitan Commuter Transportation Mobility Tax (MCTMT). This is an employer-paid tax; no amount is deducted from employees' wages. The MCTD includes several counties in New York. The tax rate is based on the amount of an employer's payroll expense in a calendar quarter. See Metropolitan Commuter Transportation Mobility Tax.
- Employers that have employees who are registered or licensed under the jurisdiction of the Waterfront of New York Harbor Commission for work within the Port of New York district are required to pay the Waterfront of New York Harbor Commission Assessment. The rate of assessment is based on an annual estimate of the employer's gross payroll payments made to covered employees. The assessment is only paid by covered employers; nothing is withheld from employees' wages. See Waterfront of New York Harbor Commission Assessment.