Purpose

To comply with NYS Department of Taxation and Finance’s requirement to report local wages and withhold tax properly for employees residing within the New York City limits.

Affected Employees

• Employees who reside in the five counties designated to be within the City of New York who do not have the proper New York City withholding tax withheld.
• Employees residing outside of the five counties designated to be within the City of New York who are having New York City withholding tax incorrectly withheld.

The five counties designated to be within the City of New York are: Bronx County, Kings County, New York County, Queens County and Richmond County.

Effective Date(s)

Immediately

Background

Beginning with the tax year 2003, the New York State Department of Taxation and Finance has required all employers to report New York State, New York City and City of Yonkers wages in specific boxes on the Form W-2. A review of OSC payroll data identified employees with potential New York City withholding tax errors.

OSC Actions

OSC will provide agencies with hard copy listings of affected employees and instructions for agencies to update employees’ tax data for the proper reporting of New York City wages (See Attachment #1).

OSC has produced two listings affecting 2004 tax reporting:

1. Employees with zip code within NYC who do not have withholdings for local taxes
2. Employees with local tax withholdings and zip code not within NYC

The listings were produced on August 19, 2004 and mailed to agencies on August 31, 2004.

In order to properly report wages at the end of this calendar year, OSC will manually adjust the earnings balances of all employees determined to have incorrect local tax data information based upon the agency-provided information on the listings.

Agency Actions

1. Verify address information for each employee identified on the OSC-generated listings according to the instructions in Attachment #1 to this Bulletin.
2. Provide employees with a Form IT-2104 (Employee's Withholding Allowance Certificate and Instructions), Form IT-2104-E (Certificate of Exemption from Withholding) or Form IT-2104.1 (New York State, City of New York, and City of Yonkers Certificate of Non-residence and Allocation of Withholding Tax) to complete.
3. Update the employee tax data information in PayServ according to the tax form submitted.
4. Provide effective dates on the OSC-generated listings when employee moved into or moved out of the limits of New York City.
5. Return completed, updated listings to OSC by 9/30/04. Agencies must keep a copy of the updated listings for their records. Completed listings may be faxed to (518) 486-3099.

Employee Notification

Agencies may wish to use the attached sample letter (Attachment #2) to notify affected employees.

Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.