This article provides answers to several frequently asked questions about New York payroll tax.
What organization oversees payroll tax in the state?
The New York State Department of Taxation and Finance oversees collection and enforcement of withholding taxes taken from each employee’s paycheck. Employers must register with the Department of Taxation and Finance to obtain an employer identification number (EIN).
Who does the state consider an employer?
The Department of Taxation and Finance considers an employer as an entity that maintains an office or otherwise conducts business in the state of New York and employs individuals who perform services.
These individuals include any of the following:
- Residents of New York State who earn wages, whether those wages are earned in or outside the state
- Non-residents of New York State who earn wages in the state
- Residents of New York City who perform services outside of the New York City limits
- Residents of Yonkers who perform services outside of Yonkers
- Non-residents of Yonkers who earn wages in Yonkers
Employers can include entities that are individual owners, partnerships, corporations, and Limited Liability Companies. Employers include nonprofit, governmental, Indian tribe, household, and agricultural entities.
What types of payroll tax does the state collect?
Payroll tax withholdings in New York include monies for income tax, Social Security tax, and Medicare tax. Unemployment insurance contributions are fully the responsibility of the employer and should result in no deduction from an employee’s wages.
What payroll tax rates are used by the state?
For payroll taxes, New York has separate payroll tax withholding rates based on if wages are earned from work perform in New York City, Yonkers, or elsewhere within New York State. The Department of Taxation and Finance publishes withholding tax tables for New York State (NYS-50-T-NYS), New York City (NYS-50-T-NYC), and Yonkers (NYS-50-T-Y).
For unemployment insurance, the tax withholding rates are set for the entire state. The rates range from 0 percent to 8.9 percent normally but may be increase by an additional subsidiary tax of up to .925 percent depending on the individual employer.
What forms are used for payroll tax?
The Department of Taxation and Finance uses the following forms:
- Form NYS-100, New York State Employer Registration for Unemployment Insurance, Withholding, and Wage Reporting, for the registration of an employer with the Department of Taxation and Finance and Department of Labor-Unemployment Insurance
- Form NYS-45, Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return, for the quarterly filing and paying New York State payroll taxes
- Form NYS-1, Return of Tax Withheld, to remit to New York State personal income taxes withheld from an employee’s wages
When are payroll taxes and tax forms due?
Employers must file reporting and pay withholding taxes on a quarterly basis. For each calendar quarter, quarterly reporting and associated withholdings are due to the Department of Taxation and Finance on April 30, July 31, October 31, and January 31.
If you have questions about your payroll taxes or need help filing the appropriate returns, you may contact a tax attorney by completing the form on this web site or calling the phone number located at the top of this page.
Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.