State Agencies Bulletin No. 1715

Subject
Summary of Tax Related Changes for 2019
Date Issued
January 31, 2019

Purpose

To inform agencies of the updated IRS tax withholding requirements for 2019 and other tax related topics

Affected Employees

Employees meeting the criteria as explained in this bulletin

Summary of Changes

To date, the IRS has issued guidance on changes to the following areas for 2019:

  • Withholding Rates and Tax Brackets
  • Additional Withholding Adjustment for Nonresident Aliens
  • Supplemental Wage Withholding Flat Rate
  • Social Security Wage Base Limit
  • Contribution Limits on Pension/Retirement Plans
  • Qualified Transportation & Parking Fringe Benefits Limit
  • Mileage Rates
  • Individual Taxpayer Identification Number (ITIN) - Renewal/Expiration

Tax Rates

Federal Tax Changes

IRS Notice 1036 provides an early release of certain 2019 Income Tax changes reflected in IRS Publication 15 (Circular E) Employer’s Tax Guide 2019. To access this notice, visit the Internal Revenue Service website at https://www.irs.gov/pub/irs-pdf/n1036.pdf

A summary of the changes are as follows:

Federal Tax Withholding Rates
All changes were effective in the first paycheck of January, 2019.

Federal Withholding Allowance
The value of one withholding allowance has increased to $4,200 for 2019.

NY Tax Withholding Rates
The 2019 New York State, New York City, and Yonkers withholding tax tables have been updated.

New York State, New York City and Yonkers Withholding Allowance
The value of one New York State, New York City and Yonkers withholding allowance remains at $1,000.

Additional Withholding Adjustment for Nonresident Aliens
The withholding of federal income tax on the wages of nonresident alien employees is subject to an additional withholding amount that is added to nonresident alien employees’ wages for calculating Federal income tax. The additional withholding amount added to annual income has increased to $8,000 for 2019. This procedure does not apply to nonresident alien students from India.

Supplemental Wage Withholding
OSC uses the Aggregate method for Supplemental Wage Withholding. (This is provided for informational purposes only.)

Social Security & Medicare Wage Base and Tax Rate Information
The Social Security wage base limit for 2019 has increased to $132,900 (max tax $8,239.80). There is no limit on the amount of wages subject to Medicare tax. The Social Security tax rate of 6.2% and Medicare tax rate of 1.45% remain the same. Employees receiving income in excess of $200,000 will be subject to an additional Medicare Tax of .9%. The additional tax applies only to income above the $200,000 threshold and is only paid by employees.

Contribution Limits on Pension/Retirement Plans

403(b) and 457 Deferred Compensation

The limit has increased to $19,000. Please refer to Payroll Bulletin No. 1700 for additional information.

Pre-Tax Benefits

Qualified Parking Benefits

The maximum exclusion from gross income for qualified parking benefits has increased to $265 per month in 2019.

Qualified Transit Pass

The maximum exclusion from gross income for qualified transportation benefits has increased to $265 per month in 2019.

Mileage Rate

The standard mileage rate for computing the value of personal use of an employer provided vehicle is 58 cents per mile in 2019.

ITIN Renewal/Expiration

Unused ITINs – ITINs not used on a federal income tax return in the last three years (covering 2015, 2016 or 2017) will no longer be valid to use on a tax return as of January 1, 2019. ITIN holders in this group who need to file a tax return for 2019 will need to renew their ITINs. The renewal period began October 1, 2018.

Expired ITINs – ITINs issued before 2013 with the middle digits of 73, 74, 75, 76, 77, 81 or 82 (Example: 9XX-73-XXXX) will expire at the end of 2018. The renewal period for these ITINs began October 1, 2018. ITINs with the middle digits 70, 71, 72, 78, and 80 that expired in 2017 can be renewed. The IRS will mail letters to this group to inform them of the need to renew their ITINs if they need to file a tax return and explain steps they need to take.

OSC Actions

OSC has updated PayServ with the new IRS and NY tax requirements for 2019. OSC continues to use the Percentage Method on an Annual payroll period for income tax withholding purposes (for informational purposes only).

Agency Actions

Informational. Please inform employees.

Questions

Questions regarding this bulletin may be emailed to the Tax and Compliance mailbox.