Vision Payroll

August 2, 2011

New York Issues Guidance on Withholding from Same-Sex Married Employees

NY Governor Andrew Cuomo
NY Governor Andrew Cuomo
Due to the recent enactment in New York of the Marriage Equality Act, The New York State Department of Taxation and Finance has updated information for same-sex married employees and their employers.

Employers Should Not Withhold on Certain Benefits

New York employers of same-sex married employees should institute the following changes:

  • Don’t withhold New York tax on certain benefits provided to a same-sex married employee. You don’t need to withhold tax for New York State, New York City, or Yonkers income tax purposes on the value of certain benefits (e.g., domestic partner health benefit), even though it’s subject to federal withholding. This applies if the employee’s federal taxable wages subject to withholding include the value of the benefits, and the value of these benefits wouldn’t be included in taxable wages if provided to a different-sex married spouse.
  • When reporting the annual wage totals on Form NYS-45, Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return, Part C, column d; report the federal wages minus any amount of benefits discussed above that you don’t withhold on for New York purposes (plus any amount of any taxable 414(h) retirement contributions and any IRC 125 amounts from a New York City flexible benefits program for governmental employees).
  • Continue to use the rules described in the NYS-50, Employer’s Guide to Unemployment Insurance, Wage Reporting, and Withholding Tax for reporting State and local wages on federal Form W-2, Wage and Tax Statement.

Same-Sex Employees Should Consider Filing a New Form IT-2104

Same-sex employees should consider filing a new Form IT-2104, Employee’s Withholding Allowance Certificate, if they will be changing their filing status on their 2011 New York income tax return. They should also provide proof of a legal marriage to their employer so that the employer can stop withholding New York tax on the value of benefits subject to federal withholding that wouldn’t be subject to New York withholding, (e.g., domestic partner health benefit).

Contact Vision Payroll Today

Contact Vision Payroll if you have further questions on the changes in New York to withholding on same-sex married employees.

September 10, 2010

Question of the Week: Why Did My NYC Withholding Go Up?

Filed under: News — Tags: , , , — Vision @ 8:02 pm
Why Did My NYC Withholding Go Up?
Why Did My NYC Withholding Go Up?
This week’s question comes from Terry, a small business owner in New York City. My net pay is the same every week, but last week’s net pay changed. Upon further review, the difference is because the withholding tax for New York City increased from the week before. Why did my NYC withholding go up? Answer: Effective September 1, 2010, new withholding tables went into effect for New York City withholding.

Increase Affects Employees Earning $500,000 or More per Year

The change in withholding affects taxpayers who make $500,000 or more per year. Tax must be withheld according to Publication NYS-50-T.2, Revised New York City Withholding Tax Computation Rules.

New York State and Yonkers Withholding not Affected

The New York State personal income tax rates, Yonkers resident personal income surcharge tax rate, and Yonkers nonresident earnings tax rate have not changed. Employers should continue to use the methods in Publications NYS-50-T (dated 1/06) and NYS-50-T.1 (dated 1/10) to determine the amounts to be withheld for these taxes.

Vision Payroll Has Updated Withholding Tables in Use

Effective September 1, 2010, Vision Payroll is using the revised withholding calculations for all affected taxpayers.

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