Withholding of Tax

NYC Admin. Code tit. 11, ch. 17, subch. 4

in effect

NYC Admin. Code § 11-1771 Requirement of withholding tax from wages.

§ 11-1771 Requirement of withholding tax from wages. (a) General. (1) Every employer maintaining an office or transacting business within this city or state and making payment on and after January first, nineteen hundred seventy-seven of any wages taxable under this chapter, or under section two of chapter eight hundred eighty-two of the laws of nineteen hundred seventy-five, as amended by chapter eight hundred eighty-six of the laws of nineteen hundred seventy-five, 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 chapter or such section two resulting from the inclusion in the employee's city adjusted gross income of his or her wages received during such calendar year. The method of determining the amount to be withheld shall be prescribed by regulations of the tax commission, with due regard to the city withholding exemptions of the employee and the sum of any credits allowable against his or her tax. The section shall not apply to payments by the United States for service in the armed forces of the United States so long as the right to require deduction and withholding of tax from such payments is prohibited by the laws of the United States. Service in the armed forces of the United States shall have the same meaning as when used in a comparable context in the laws of the United States relating to withholding of city income taxes. (2) The tax commission may provide, by regulations, for withholding: (A) from remuneration for services performed by an employee for his or her 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 chapter, 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 chapter, 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. * Editor's note: there are two divisions designated (b) in this section. (1) For purposes of this chapter, any payment subject to withholding, within the meaning of paragraph two of this subdivision, 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 subdivision, a payment subject to withholding means: (A) Any supplemental unemployment compensation benefit paid to an individual to the extent includible in such individual's city adjusted gross 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. (C) Any payment of an annuity to an individual to the extent includible in such individual's city adjusted gross income, if at the time the payment is made a request that such annuity be subject to withholding under this chapter 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 and such proceeds are payable pursuant to a prize claim made by an individual who was a resident of the city at the time of the selection of the prize winning lottery ticket. (E) [Repealed.] (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 code. (3) Additional provisions applicable to this subdivision. (A) Request for annuity withholding. A request that an annuity be subject to withholding under this chapter 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 subdivision changes status from resident to nonresident, withholding in accordance with such subparagraph shall constitute other security acceptable to the commissioner of taxation and finance within the meaning of paragraph four of subdivision (c) of section 11-1754, unless such payee elects, in such manner as the commissioner of taxation and finance shall prescribe, to apply the provisions of paragraph one of such subdivision (c) to the proceeds, in which case withholding under this subdivision shall no longer apply to such proceeds. (C) Proceeds. For purposes of subparagraphs (D) and (E) of paragraph two of this subdivision, 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 subdivision shall be withheld at the highest rate of tax on city taxable income, without any allowance for deductions or exemptions, in effect under this chapter 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 subdivision, 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. (b)* Extension of withholding to unemployment compensation benefits, annuity payments, and lottery winnings. * Editor's note: there are two divisions designated (b) in this section. (1) For purposes of this chapter: (A) any supplemental unemployment compensation benefit paid to an individual to the extent includible in such individual's city adjusted gross income, (B) any payment of an annuity to an individual to the extent includible in such individual's city adjusted gross income, if at the time the payment is made a request that such annuity be subject to withholding under this chapter 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 chapter is in effect, shall be treated as if it were a payment of wages by an employer to an employee for a payroll period. (D) 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. (2) Request for withholding. A request that an annuity be subject to withholding under this chapter 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 chapter 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 chapter 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 subdivision (c) of section 11-1754 of this chapter. 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. (c) Withholding exemptions. For purposes of this section: (1) The number of city withholding exemptions which an employee receiving wages taxable under this chapter may claim shall not exceed the number of city exemptions allowed pursuant to the provisions of section 11-1716 and such additional city 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 city withholding exemption shall be the amount of the city exemption allowed pursuant to the provisions of section 11-1716. (3) Withholding exemption certificate. An employee shall be required to file with his employer a withholding exemption certificate in accordance with regulations or instructions prescribed by the commissioner of taxation and finance.

NYC Admin. Code § 11-1772 Information statement for employee.

§ 11-1772 Information statement for employee. Every employer required to deduct and withhold tax under this chapter from the wages of an employee, or who would have been required so to deduct and withhold tax if the employee had claimed no more than one withholding exemption, shall furnish to each such employee in respect of the wages paid by such employer to such employee during the calendar year on or before February fifteenth of the succeeding year, or, if his or her employment is terminated before the close of such calendar year, within thirty days from the date on which the last payment of the wages is made, a written statement as prescribed by the tax commission showing the amount of wages paid by the employer to the employee, the amount deducted and withheld as tax, and such other information as the tax commission shall prescribe. The written statement required herein may be furnished to such employee in an electronic format.

NYC Admin. Code § 11-1773 Credit for tax withheld.

§ 11-1773 Credit for tax withheld. Wages upon which tax is required to be withheld shall be taxable under this chapter as if no withholding were required, but any amount of tax actually deducted and withheld under this chapter in any calendar year shall be deemed to have been paid to the tax commission on behalf of the person from whom withheld, and such person shall be credited with having paid that amount of tax for the taxable year beginning in such calendar year. For a taxable year of less than twelve months, the credit shall be made under regulations of the tax commission.

NYC Admin. Code § 11-1774 Employer's return and payment of withheld taxes.

§ 11-1774 Employer's return and payment of withheld taxes. (a) General. Every employer required to deduct and withhold tax under this chapter shall file a withholding return and pay over to the tax commission or to a depository designated by the tax commission, the taxes so required to be deducted and withheld, as hereafter prescribed. (1) If, after having made a payroll, an employer has been required to deduct and withhold, but has not paid over, a cumulative aggregate amount of seven hundred dollars or more of tax during a calendar quarter, such employer shall file a return and pay over the tax. If an employer was required to remit a cumulative aggregate amount of less than fifteen thousand dollars in withholding tax during the calendar year which precedes the previous calendar year, the tax shall be paid over on or before the fifth business day following the date of making such a payroll. If an employer was required to remit a cumulative aggregate amount more than or equal to fifteen thousand dollars in withholding tax during the calendar year which precedes the previous calendar year, the tax shall be paid over on or before the third business day following the date of making such a payroll. In the case of an "educational organization" as defined in paragraph two of subsection (a) of section nine of the tax law or a "health care provider" as defined in paragraph four of subsection (a) of section nine of the tax law, the tax shall be paid over on or before the fifth business day following the date of making such a payroll. (2) If, at the close of any calendar quarter, an employer has been required to deduct and withhold, but has not paid over, a cumulative aggregate amount of less than seven hundred dollars of tax during such calendar quarter, such employer shall pay over the tax with the quarterly combined withholding, wage reporting and unemployment insurance return required to be filed for such quarter by paragraph four of this subdivision, on or before the last date prescribed by such paragraph for filing such return. (3) If an employer makes more than one payroll per week, then such employer shall determine the applicability of the rules described in paragraphs one and two of this subdivision measured by the last payroll made within the week by such employer; provided, however, that in any week in which the end of a quarter occurs between the making of payrolls by an employer, any tax required to be deducted and withheld in a payroll or payrolls made during such week prior to or on the end of the quarter shall be paid over. If an employer was required to remit a cumulative aggregate amount of less than fifteen thousand dollars in withholding tax during the calendar year preceding the previous calendar year, the tax shall be paid over on or before the fifth business day following the date of making the last payroll in such quarter. If an employer was required to remit a cumulative aggregate amount more than or equal to fifteen thousand dollars in withholding tax during the calendar year preceding the previous calendar year, the tax shall be paid over on or before the third business day following the date of making the last payroll in such quarter. In the case of an "educational organization" as defined in paragraph two of subsection (a) of section nine of the tax law or a "health care provider" as defined in paragraph four of subsection (a) of section nine of the tax law, the tax shall be paid over on or before the fifth business day following the date of making such a payroll. For purposes of this paragraph, the term "week" shall mean the period Sunday through Saturday. (4) (A) All employers described in paragraph one of subdivision (a) of section 11-1771, including those whose wages paid are not sufficient to require the withholding of tax from the wages of any of their employees, all employers required to provide the wage reporting information for the employees described in subdivision one of section one hundred seventy-one-a of the tax law, and all employers liable for unemployment insurance contributions or for payments in lieu of such contributions pursuant to article eighteen of the labor law, shall file a quarterly combined withholding, wage reporting and unemployment insurance return with the department of taxation and finance detailing the preceding calendar quarter's withholding tax transactions, such quarter's wage reporting information, such quarter's unemployment insurance contributions, and such other related information as the commissioner of taxation and finance or the commissioner of labor, as applicable, may prescribe. In addition, the return covering the last calendar quarter of each year shall also include withholding reconciliation information for such calendar year. Such returns shall be filed no later than the last day of the month following the last day of each calendar quarter; provided, however, that an employer may provide the wage reporting information covering the last calendar quarter of each year, and the withholding reconciliation information for such year no later than February twenty-eighth of the succeeding year. (B) An employer shall, at the time prescribed by subparagraph (A) of this paragraph for filing each quarterly combined withholding, wage reporting and unemployment insurance return, pay over, in a single remittance, the unemployment insurance contributions and aggregate withholding taxes required to be paid over with such return. Notwithstanding any provision of law to the contrary, an overpayment of unemployment insurance contributions or of aggregate withholding taxes made by an employer with the quarterly combined withholding, wage reporting and unemployment insurance return for a calendar quarter may be only credited by such employer against such employer's liability for unemployment insurance contributions or aggregate withholding taxes, respectively. (5) The tax commission may, if it believes such action necessary for the protection of the revenues, require any employer to make such return and pay to it the tax deducted and withheld at any time, or from time to time. (6) "Aggregate amount" as used in paragraphs one, two and three of this subdivision means the aggregate of the aggregate amounts of New York state personal income tax, city personal income tax on residents and city earnings tax on nonresidents authorized pursuant to article two-E of the general city law required to be deducted and withheld. (b) Deposit in trust for tax commission. Whenever any employer fails to collect, truthfully account for, pay over the tax, or make returns of the tax as required in this section, the tax commission may serve a notice requiring such employer to collect the taxes which become collectible after service of such notice, to deposit such taxes in a bank approved by the tax commission, in a separate account, in trust for and payable to the tax commission, and to keep the amount of such tax in such account until payment over to the tax commission. Such notice shall remain in effect until a notice of cancellation is served by the tax commission.

NYC Admin. Code § 11-1775 Employer's liability for withheld taxes.

§ 11-1775 Employer's liability for withheld taxes. Every employer required to deduct and withhold tax under this chapter is hereby made liable for such tax. For purposes of assessment and collection, any amount required to be withheld and paid over to the tax commission, and any additions to tax, penalties and interest with respect thereto, shall be considered the tax of the employer. Any amount of tax actually deducted and withheld under this chapter shall be held to be a special fund in trust for the tax commission. No employee shall have any right of action against his or her employer in respect to any moneys deducted and withheld from his or her wages and paid over to the tax commission in compliance or in intended compliance with this chapter.

NYC Admin. Code § 11-1776 Employer's failure to withhold.

§ 11-1776 Employer's failure to withhold. If an employer fails to deduct and withhold tax as required, and thereafter the tax against which such tax may be credited is paid, the tax so required to be deducted and withheld shall not be collected from the employer, but the employer shall not be relieved from liability for any penalties, interest, or additions to the tax otherwise applicable in respect of such failure to deduct and withhold.

NYC Admin. Code § 11-1777 Designation of third parties to perform acts required of employers.

§ 11-1777 Designation of third parties to perform acts required of employers. In case a fiduciary, agent, or other person has the control, receipt, custody, or disposal of, or pays the wages of an employee or group of employees, employed by one or more employers, the tax commission, under regulations promulgated by it, is authorized to designate such fiduciary, agent, or other person to perform such acts as are required of employers under this chapter and as the tax commission may specify. Except as may be otherwise prescribed by the tax commission, all provisions of law (including penalties) applicable in respect of an employer shall be applicable to a fiduciary, agent, or other person so designated but, except as so provided, the employer for whom such fiduciary, agent, or other person acts shall remain subject to the provisions of law (including penalties) applicable in respect of employers.

NYC Admin. Code § 11-1778 Liability of third parties paying or providing for wages.

§ 11-1778 Liability of third parties paying or providing for wages. (a) Direct payment by third party. If a lender, surety or other person, who is not an employer with respect to an employee or group of employees, pays wages directly to such an employee or group of employees, employed by one or more employers, or to an agent on behalf of such employee or employees, such lender, surety or other person shall be liable for the amount of taxes (together with interest) required to be deducted and withheld from such wages by the employer. (b) Funds supplied to employer by third parties. If a lender, surety or other person supplies funds to or for the account of an employer for the specific purpose of paying wages of the employees of such employer, with actual notice or knowledge that such employer does not intend to or will not be able to make timely payment or deposit of the amounts of tax required by this chapter to be deducted and withheld by such employer from such wages, such lender, surety or other person shall be liable for the amount of the taxes (together with interest) which are not paid over to the tax commission by such employer with respect to such wages. However, the liability of such lender, surety or other person shall be limited to an amount equal to twenty-five percent of the amount so supplied to or for the account of such employer for such purpose. (c) Effect of payment. Any amounts paid to the tax commission pursuant to this section shall be credited against the liability of the employer.

Source: City of New York, Charter, Administrative Code and Rules (American Legal Publishing XML export, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/newyorkcity/latest/NYCadmin/0-0-0-14118Fetched: 10/24/2026