Date: July 22, 1999
Bulletin No. 108
|Subject||Changes in NYC Tax Withholding Requirements|
|Purpose||To explain changes in tax withholding requirements for employees who work in New York City but do not reside there and to implement changes in the "commuter tax."|
New York State residents who WORK in the five boroughs of New York City,
but do not reside there, will no longer be subject to the NYC nonresident
Employees who WORK in the five boroughs of New York City and reside in another State will continue to be subject to the NYC nonresident withholding tax.
|Limitations||This Bulletin outlines conditions in effect as of June 30, 1999. Instructions will be provided through PaySR broadcasts and Payroll Bulletins as additional information becomes available.|
Paychecks dated July 1, 1999
for the Institutional payroll.
Paychecks dated July 7, 1999 for the Administrative payroll.
Form NYC-2104-E, City of New York Certificate of Exemption from
Nonresident Earnings Tax Withholding.
Form IT-2104.1, New York State Certificate of Nonresidence and Allocation of Withholding Tax.
Form IT-2104.2, City of New York Certificate of Nonresidence.
|Impact on Current Employees||No agency action is required for the records of current employees. For active affected employees, OSC has inserted a row of data on the Federal and Local Employee Tax Data panels and has deleted the Locality = P0001 on the Employee Tax Distribution panel.|
|Impact on New Hires and Transfers||
Newly hired or transferred employees
who WORK in New York City but do not reside there and who LIVE in New York
State will be required to submit a completed Form NYC-2104-E to their
Payroll Office to claim exemption from the nonresident tax.
Newly hired or transferred employees who WORK in New York City and live outside New York State should complete the IT-2104.2 form. NYC nonresident taxes and withholding will be based on the IT-2104.2 form they submit.
The agency Payroll Office needs to enter tax information on the employee's PaySR record for each newly hired or transferred employee.
|Impact on Position Changes||Employees who have a position change that affects their tax status will be required to submit a completed tax form to their Payroll Office. The agency Payroll Office needs to enter tax information on the employee's PaySR record to reflect the change.|
Address Changes for NYC Employees
Employees are required to notify the
agency Payroll Office within ten days of any change in status from
nonresident to resident of the City of New York or from resident to
nonresident of New York State while continuing to work in New York City.
Employees who work in New York City and move out of New York State must file form IT-2104.1. They should be reported with nonresident NYC withholding taxes.
Employees who work in New York City and move from another state to a location in New York State must file:
Procedures to Discontinue Nonresident
1. Open the Federal Tax Data 1
Path Name: Compensate Employees - Maintain Payroll Data U.S - Use - Employee Tax Data - Update/Display
2. Select the Employee record.
3. Insert a new row.
4. Specify the effective date of the tax data change:
5. Enter Federal and State tax information for the employee (refer to On Line Help for detailed instructions).
6. Open the State Tax Data 1 panel.
7. Confirm the default or type the State indicating where the employee works.
8. Confirm that Resident is checked. This must always be checked on the State Tax panel, regardless of the employee's actual residency status.
9. The Non-Residency Statement Filed option is for agency use. It does not affect payroll processing or the application of state tax rules.
10. Confirm the UI Jurisdiction is checked.
11. Open the Local Tax Data panel.
12. Click on the innermost scroll bar and delete the row which identifies the employee as Locality = P0001 (New York City) and Resident =€ (not checked) on the employee's Local Tax Data panel.
13. A warning message will appear, "Delete current row?" Click OK.
14. Save the information
15. Open Employee Tax Distribution panel
Path Name: Compensate Employees - Maintain Payroll Data U.S. - Use - Employee Tax Distribution - Update/Display
16. Select the employee.
17. Record the employee's local tax distribution information:
18. Save the information and close the panel.
You can contact the NYS Department of
Taxation and Finance via:
|Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.|