New York Withholding laws & HR compliance analysis

New York Withholding: What you need to know

The New York State Tax Law requires that employers withhold tax from all wages paid to residents regardless of where their services are performed, and from wages paid to nonresidents for services performed within New York State. Taxes must be withheld from all compensation that is taxable under federal law, including tips and supplemental unemployment benefits.
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Exemptions. Contributions to deferred compensation plans, cafeteria plan contributions that are exempt from federal withholding, and pension and annuity payments are not subject to withholding.
Supplemental wage payment withholding. If supplemental wages (e.g., bonuses, commissions, overtime pay, sales awards) are paid with regular wages but the amount of the supplemental payment is not specified, employers are to withhold income tax as if the total were a single payment for a regular payroll period. If supplemental wages are paid separately or combined with regular wages in a single payment with the amount of each specified, the income tax withholding method depends partly on whether income tax is withheld from an employee’s regular wages.
New York City. All wages paid to New York City residents are subject to city income tax withholding even though the services were performed outside the city.
Yonkers. All wages paid to Yonkers residents are subject to Yonkers income tax withholding even though the services were performed outside the city. All employers that transact business or maintain a place of business in Yonkers are required to withhold Yonkers nonresident income taxes from all wages earned by employees who are not Yonkers residents for services performed in Yonkers. Such employees must give the employer Form ...

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