N.Y.
Tax Law Section 671
Requirement of withholding tax from wages
(a)
General.(1)
Every employer maintaining an office or transacting business within this state and making payment of any wages taxable under this article shall deduct and withhold from such wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee’s wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due under this article resulting from the inclusion in the employee’s New York adjusted gross income or New York source income of the employee’s wages received during such calendar year. The method of determining the amount to be withheld shall be prescribed by the commissioner, with due regard to the New York withholding exemptions of the employee and the sum of any credits allowable against the employee’s tax. The commissioner shall publish any changes to such method of determining the amount of tax to be withheld on the website of the department of taxation and finance. The commissioner shall also cause notice of such changes to be published in the section for miscellaneous notices in the state register and shall give other appropriate general notice of such changes.(2)
The tax commission may provide, by regulations, for withholding-- (A) from remuneration for services performed by an employee for his employer which does not constitute wages, and (B) from any other type of payment, with respect to which the tax commission finds that withholding would be appropriate under the provisions of this article, if the employer and the employee, or in the case of any other type of payment the person making and the person receiving the payment, agree to such withholding. Such agreement shall be made in such form and manner as the tax commission may by regulations provide. For purposes of this article, remuneration or other payments with respect to which such agreement is made shall be treated as if they were wages paid by an employer to an employee to the extent that such remuneration is paid or other payments are made during the period for which the agreement is in effect.(3)
The tax commission shall provide by regulation for an exemption from withholding for (i) employees under eighteen years of age, (ii) employees under twenty-five years of age who are full-time students and (iii) employees over sixty-five years of age, provided such employees had no income tax liability in the prior year and can reasonably anticipate none in the current year. * (b) Extension of withholding to certain periodic payments and gambling winnings.(1)
For purposes of this article, any payment subject to withholding, within the meaning of paragraph two of this subsection, shall be treated as if it were wages paid by an employer to an employee.(2)
Payments subject to withholding. For purposes of paragraph one of this subsection, a payment subject to withholding means: (A) Any supplemental unemployment compensation benefit paid to an individual to the extent includible in such individual’s New York adjusted gross income or New York source income. ** (B) Any member or employee contributions to a retirement system or pension fund picked up by the employer pursuant to subdivision f of section five hundred seventeen or subdivision d of section six hundred thirteen of the retirement and social security law or section 13-225.1, 13-327.1, 13-125.1, 13-125.2 or 13-521.1 of the administrative code of the city of New York or subdivision nineteen of Education Law § 2575 (Retirement of employees of board of education)section twenty-five hundred seventy-five of the education law and any member or employee contributions to a retirement system or pension fund picked up or paid by the employer for members of the Manhattan and Bronx surface transportation authority pension plan and treated as employer contributions in determining income tax treatment under section 414(h) of the Internal Revenue Code. ** NB Effective until ch 525/2011 § 4 takes effect ** (B) Any member or employee contributions to a retirement system or pension fund picked up by the employer pursuant to subdivision f of section five hundred seventeen, subdivision d of section six hundred thirteen or section twelve hundred four-a of the retirement and social security law or section 13-225.1, 13-327.1, 13-125.1, 13-125.2 or 13-521.1 of the administrative code of the city of New York or subdivision nineteen of Education Law § 2575 (Retirement of employees of board of education)section twenty-five hundred seventy-five of the education law and any member or employee contributions to a retirement system or pension fund picked up or paid by the employer for members of the Manhattan and Bronx surface transportation authority pension plan and treated as employer contributions in determining income tax treatment under section 414(h) of the Internal Revenue Code. ** NB Effective when ch 525/2011 § 4 takes effect until expiration per ch 681/1992 § 16 ** (B) Any member or employee contributions to a retirement system or pension fund picked up by the employer pursuant to subdivision f of section five hundred seventeen or subdivision d of section six hundred thirteen of the retirement and social security law or section 13-225.1, 13-327.1 or 13-125.1 of the administrative code of the city of New York. ** NB Effective upon expiration of ch 681/1992 § 16 (C) Any payment of an annuity to an individual to the extent includible in such individual’s New York adjusted gross income or New York source income, if at the time the payment is made a request that such annuity be subject to withholding under this article is in effect. (D) Any payment of winnings from a wager placed in a lottery conducted by the division of the lottery, if the proceeds from such wager exceed five thousand dollars. (E) Any gambling winnings from a wagering transaction within this state, if the proceeds from the wager are subject to withholding under section three thousand four hundred two of the internal revenue code. (F) Any amount deducted or deferred from an employee’s salary under a flexible benefits program established pursuant to General Municipal Law § 23 (Flexible benefits program)section twenty-three of the general municipal law or Public Authorities Law § 1210-A (Flexible benefits program)section one thousand two hundred ten-a of the public authorities law. (G) Any amount by which an employee’s salary is reduced pursuant to the provisions of subdivision b of section 12-126.1 and subdivision b of section 12-126.2 of the administrative code of the city of New York.(3)
Additional provisions applicable to this subsection. (A) Request for annuity withholding. A request that an annuity be subject to withholding under this article shall be made by the payee in writing to the person making the annuity payments. Such a request may, notwithstanding any provision of law to the contrary, be terminated by furnishing to the person making the payments a written statement of termination. Such a request for withholding or statement of termination shall take effect in such manner as the commissioner of taxation and finance shall prescribe. (B) Withholding on lottery winnings upon change of residence. If a payee of lottery winnings subject to the provisions of subparagraph (D) of paragraph two of this subsection changes status from resident to nonresident, withholding in accordance with such subparagraph shall constitute other security acceptable to the commissioner within the meaning of subsection (d) of § 639 (Accruals upon change of residence)section six hundred thirty-nine of this article. (C) Proceeds. For purposes of subparagraphs (D) and (E) of paragraph two of this subsection, proceeds from a wager shall be determined by reducing the amount received by the amount of the wager. (D) Taxes withheld at maximum rate. The tax withheld on any payment subject to withholding under subparagraph (D) or (E) of paragraph two of this subsection shall be withheld at the highest rate of tax on New York taxable income, without any allowance for deductions or exemptions, in effect under this article for the taxable year in which the payment is made. (E) Determination of residence. For purposes of applying the provisions of subparagraphs (D) and (E) of paragraph two of this subsection, any payor of proceeds shall determine the residence of the payee of such proceeds in accordance with regulations or instructions of the commissioner of taxation and finance or, in the absence of any such regulations or instructions, in accordance with the address of the payee required under the provisions of paragraph six of subsection (q) of section thirty-four hundred two of the internal revenue code. * NB Expires per ch. 782/88 § 8 * (b) Extension of withholding to unemployment compensation benefits, annuity payments, and lottery winnings.-- (1) For purposes of this article-- (A) any supplemental unemployment compensation benefit paid to an individual to the extent includible in such individual’s New York adjusted gross income or New York source income, (B) any payment of an annuity to an individual to the extent includible in such individual’s New York adjusted gross income or New York source income, if at the time the payment is made a request that such annuity be subject to withholding under this article is in effect, and (C) any periodic payment (but only where such payment is part of a series of payments extending over a period greater than one year) of lottery winnings by the division of the lottery, if at the time the payment is made a request that such lottery winnings be subject to withholding under this article is in effect, shall be treated as if it were a payment of wages by an employer to an employee for a payroll period.(2)
Request for withholding.--A request that an annuity be subject to withholding under this article shall be made by the payee in writing to the person making the annuity payments, and a request that lottery winnings be subject to withholding under this article shall be made by the payee in writing to the division of the lottery, in the manner prescribed by the commissioner of taxation and finance. A request that an annuity be subject to withholding may, notwithstanding any provision of law to the contrary, be terminated by furnishing to the person making the payments a written statement of termination. A request that lottery winnings be subject to withholding under this article shall not be revocable while the payee is a nonresident, and shall constitute other security acceptable to the tax commission within the meaning of paragraph four of subsection (c) of § 654 (Relief from joint and several liability on joint return)section six hundred fifty-four of this article. Such a request for withholding or statement of termination shall take effect in such manner as the commissioner of taxation and finance shall provide by regulation. * NB Effective per ch. 782/88 § 8 (c) Withholding exemptions. For purposes of this section:(1)
The number of New York withholding exemptions which an employee receiving wages taxable under this article may claim shall not exceed the number of New York exemptions allowed pursuant to the provisions of section six hundred sixteen and such additional New York withholding exemptions as may be prescribed by regulations or instructions of the commissioner of taxation and finance, taking into account the applicable standard deduction and such other factors as he finds appropriate.(2)
The amount of each New York withholding exemption shall be the amount of the New York exemption allowed pursuant to the provisions of section six hundred sixteen.(3)
Withholding exemption certificate. An employee shall be required to file with his employer a withholding exemption certificate in accor- dance with regulations or instructions prescribed by the commissioner of taxation and finance.
Source:
Section 671 — Requirement of withholding tax from wages, https://www.nysenate.gov/legislation/laws/TAX/671 (updated Apr. 29, 2022; accessed Dec. 21, 2024).
