Purpose

To inform agencies of the personal income tax brackets and rates added to the New York State and Yonkers tax withholding tables for 2009.

Affected Employees

New York State and/or resident of Yonkers employees who claim either “Single” with a gross income of $200,000 or more or “Married” with a gross income of $300,000 or more.

There are no changes to the withholding tables or rates for New York City residents and non-residents of Yonkers.

Effective Date(s)

Paychecks dated May 7, 2009 (Institution) and paychecks dated May 13, 2009 (Administration)

Background

As a result of recent law changes, the New York State personal income tax rates and the Yonkers resident personal income surcharge tax rates have changed for certain taxpayers. These employees may see a significant increase in their New York State or Yonkers tax withholding.

Note: High-income individuals, employees with multiple jobs or married couples with higher combined incomes should review their NYS State and Yonkers withholding allowances to ensure sufficient tax withholding for 2009.

The new State personal income tax brackets and rates are retroactive to January 1, 2009 per the Budget enacted April 7, 2009. Please refer to the Laws of 2009, Chapter 57, Part Z-1 for more information.

While the new rates were issued by the Department of Taxation and Finance effective for paychecks issued after May 1, 2009, the increased rates are based on the employee’s calendar year earnings.

Agency Actions

Agencies are requested to advise their affected employees of the impact of the new rates and the possible need to revise their withholding status to meet their tax obligation for 2009. Please advise employees to use the revised Form IT-2104, Employee’s Withholding Allowance Certificate.

Questions

Questions regarding this bulletin may be directed to the Tax and Compliance mailbox. To access the new withholding brackets and rates and the revised Form IT-2104, please visit www.tax.ny.gov.