NYS Comptroller Seal  

Bureau of State Payroll Services

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." 
Affected Employees 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 withholding tax.

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.
Effective Date Paychecks dated July 1, 1999 for the Institutional payroll.

Paychecks dated July 7, 1999 for the Administrative payroll.

Forms Used 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.
Home
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:

  • An address change with the agency Payroll Office if they move to New York City. The nonresident taxes should be discontinued for these employees.
  • Form IT-2104-E if they move to New York State, but do not live in New York City. The nonresident taxes should be discontinued for these employees.
PaySR
Procedures to Discontinue Nonresident
Withholding

1. Open the Federal Tax Data 1 panel
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:

  • If the employee is newly hired, change the Effective Date to one day after the actual hire date.
  • For all other employees, change the Effective Date to the date of the 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:

  • Insert a new row.
  • If the employee is newly hired change the Effective Date to one day after the actual hire date. For all other employees, change the effective date to the date of the change.
  • Tab to locality and delete the field.

18. Save the information and close the panel.

To Obtain
Forms
You can contact the NYS Department of Taxation and Finance via:
  • Website: www.tax.state.ny.us
  • Fax on Demand: 1-800-748-3676
  • Toll Free Telephone number: 1-800-462-8100
  • Mail: 
    NYS Department of Taxation and Finance
    Taxpayer Assistance Bureau
    W.A. Harriman Campus
    Albany, NY 12227
For Additional
Information
Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.