N.Y. Tax Law § 671: Requirement of withholding tax from wages

§ 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 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 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 section twenty-three

of the general municipal law or 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 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 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.