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

§ 671. Requirement of withholding tax from wages. (a) General. (1)\nEvery employer maintaining an office or transacting business within this\nstate and making payment of any wages taxable under this article shall\ndeduct and withhold from such wages for each payroll period a tax\ncomputed in such manner as to result, so far as practicable, in\nwithholding from the employee's wages during each calendar year an\namount substantially equivalent to the tax reasonably estimated to be\ndue under this article resulting from the inclusion in the employee's\nNew York adjusted gross income or New York source income of the\nemployee's wages received during such calendar year. The method of\ndetermining the amount to be withheld shall be prescribed by the\ncommissioner, with due regard to the New York withholding exemptions of\nthe employee and the sum of any credits allowable against the employee's\ntax. The commissioner shall publish any changes to such method of\ndetermining the amount of tax to be withheld on the website of the\ndepartment of taxation and finance. The commissioner shall also cause\nnotice of such changes to be published in the section for miscellaneous\nnotices in the state register and shall give other appropriate general\nnotice of such changes.\n (2) The tax commission may provide, by regulations, for withholding--\n (A) from remuneration for services performed by an employee for his\nemployer which does not constitute wages, and\n (B) from any other type of payment, with respect to which the tax\ncommission finds that withholding would be appropriate under the\nprovisions of this article,\nif the employer and the employee, or in the case of any other type of\npayment the person making and the person receiving the payment, agree to\nsuch withholding. Such agreement shall be made in such form and manner\nas the tax commission may by regulations provide. For purposes of this\narticle, remuneration or other payments with respect to which such\nagreement is made shall be treated as if they were wages paid by an\nemployer to an employee to the extent that such remuneration is paid or\nother payments are made during the period for which the agreement is in\neffect.\n (3) The tax commission shall provide by regulation for an exemption\nfrom withholding for (i) employees under eighteen years of age, (ii)\nemployees under twenty-five years of age who are full-time students and\n(iii) employees over sixty-five years of age, provided such employees\nhad no income tax liability in the prior year and can reasonably\nanticipate none in the current year.\n * (b) Extension of withholding to certain periodic payments and\ngambling winnings.\n (1) For purposes of this article, any payment subject to withholding,\nwithin the meaning of paragraph two of this subsection, shall be treated\nas if it were wages paid by an employer to an employee.\n (2) Payments subject to withholding. For purposes of paragraph one of\nthis subsection, a payment subject to withholding means:\n (A) Any supplemental unemployment compensation benefit paid to an\nindividual to the extent includible in such individual's New York\nadjusted gross income or New York source income.\n ** (B) Any member or employee contributions to a retirement system or\npension fund picked up by the employer pursuant to subdivision f of\nsection five hundred seventeen or subdivision d of section six hundred\nthirteen of the retirement and social security law or section 13-225.1,\n13-327.1, 13-125.1, 13-125.2 or 13-521.1 of the administrative code of\nthe city of New York or subdivision nineteen of section twenty-five\nhundred seventy-five of the education law and any member or employee\ncontributions to a retirement system or pension fund picked up or paid\nby the employer for members of the Manhattan and Bronx surface\ntransportation authority pension plan and treated as employer\ncontributions in determining income tax treatment under section 414(h)\nof the Internal Revenue Code.\n ** NB Effective until ch 525/2011 § 4 takes effect\n ** (B) Any member or employee contributions to a retirement system or\npension fund picked up by the employer pursuant to subdivision f of\nsection five hundred seventeen, subdivision d of section six hundred\nthirteen or section twelve hundred four-a of the retirement and social\nsecurity law or section 13-225.1, 13-327.1, 13-125.1, 13-125.2 or\n13-521.1 of the administrative code of the city of New York or\nsubdivision nineteen of section twenty-five hundred seventy-five of the\neducation law and any member or employee contributions to a retirement\nsystem or pension fund picked up or paid by the employer for members of\nthe Manhattan and Bronx surface transportation authority pension plan\nand treated as employer contributions in determining income tax\ntreatment under section 414(h) of the Internal Revenue Code.\n ** NB Effective when ch 525/2011 § 4 takes effect until expiration per\nch 681/1992 § 16\n ** (B) Any member or employee contributions to a retirement system or\npension fund picked up by the employer pursuant to subdivision f of\nsection five hundred seventeen or subdivision d of section six hundred\nthirteen of the retirement and social security law or section 13-225.1,\n13-327.1 or 13-125.1 of the administrative code of the city of New York.\n ** NB Effective upon expiration of ch 681/1992 § 16\n (C) Any payment of an annuity to an individual to the extent\nincludible in such individual's New York adjusted gross income or New\nYork source income, if at the time the payment is made a request that\nsuch annuity be subject to withholding under this article is in effect.\n (D) Any payment of winnings from a wager placed in a lottery conducted\nby the division of the lottery, if the proceeds from such wager exceed\nfive thousand dollars.\n (E) Any gambling winnings from a wagering transaction within this\nstate, if the proceeds from the wager are subject to withholding under\nsection three thousand four hundred two of the internal revenue code.\n (F) Any amount deducted or deferred from an employee's salary under a\nflexible benefits program established pursuant to section twenty-three\nof the general municipal law or section one thousand two hundred ten-a\nof the public authorities law.\n (G) Any amount by which an employee's salary is reduced pursuant to\nthe provisions of subdivision b of section 12-126.1 and subdivision b of\nsection 12-126.2 of the administrative code of the city of New York.\n (3) Additional provisions applicable to this subsection.\n (A) Request for annuity withholding. A request that an annuity be\nsubject to withholding under this article shall be made by the payee in\nwriting to the person making the annuity payments. Such a request may,\nnotwithstanding any provision of law to the contrary, be terminated by\nfurnishing to the person making the payments a written statement of\ntermination. Such a request for withholding or statement of termination\nshall take effect in such manner as the commissioner of taxation and\nfinance shall prescribe.\n (B) Withholding on lottery winnings upon change of residence. If a\npayee of lottery winnings subject to the provisions of subparagraph (D)\nof paragraph two of this subsection changes status from resident to\nnonresident, withholding in accordance with such subparagraph shall\nconstitute other security acceptable to the commissioner within the\nmeaning of subsection (d) of section six hundred thirty-nine of this\narticle.\n (C) Proceeds. For purposes of subparagraphs (D) and (E) of paragraph\ntwo of this subsection, proceeds from a wager shall be determined by\nreducing the amount received by the amount of the wager.\n (D) Taxes withheld at maximum rate. The tax withheld on any payment\nsubject to withholding under subparagraph (D) or (E) of paragraph two of\nthis subsection shall be withheld at the highest rate of tax on New York\ntaxable income, without any allowance for deductions or exemptions, in\neffect under this article for the taxable year in which the payment is\nmade.\n (E) Determination of residence. For purposes of applying the\nprovisions of subparagraphs (D) and (E) of paragraph two of this\nsubsection, any payor of proceeds shall determine the residence of the\npayee of such proceeds in accordance with regulations or instructions of\nthe commissioner of taxation and finance or, in the absence of any such\nregulations or instructions, in accordance with the address of the payee\nrequired under the provisions of paragraph six of subsection (q) of\nsection thirty-four hundred two of the internal revenue code.\n * NB Expires per ch. 782/88 § 8\n * (b) Extension of withholding to unemployment compensation benefits,\nannuity payments, and lottery winnings.--\n (1) For purposes of this article--\n (A) any supplemental unemployment compensation benefit paid to an\nindividual to the extent includible in such individual's New York\nadjusted gross income or New York source income,\n (B) any payment of an annuity to an individual to the extent\nincludible in such individual's New York adjusted gross income or New\nYork source income, if at the time the payment is made a request that\nsuch annuity be subject to withholding under this article is in effect,\nand\n (C) any periodic payment (but only where such payment is part of a\nseries of payments extending over a period greater than one year) of\nlottery winnings by the division of the lottery, if at the time the\npayment is made a request that such lottery winnings be subject to\nwithholding under this article is in effect, shall be treated as if it\nwere a payment of wages by an employer to an employee for a payroll\nperiod.\n (2) Request for withholding.--A request that an annuity be subject to\nwithholding under this article shall be made by the payee in writing to\nthe person making the annuity payments, and a request that lottery\nwinnings be subject to withholding under this article shall be made by\nthe payee in writing to the division of the lottery, in the manner\nprescribed by the commissioner of taxation and finance. A request that\nan annuity be subject to withholding may, notwithstanding any provision\nof law to the contrary, be terminated by furnishing to the person making\nthe payments a written statement of termination. A request that lottery\nwinnings be subject to withholding under this article shall not be\nrevocable while the payee is a nonresident, and shall constitute other\nsecurity acceptable to the tax commission within the meaning of\nparagraph four of subsection (c) of section six hundred fifty-four of\nthis article. Such a request for withholding or statement of termination\nshall take effect in such manner as the commissioner of taxation and\nfinance shall provide by regulation.\n * NB Effective per ch. 782/88 § 8\n (c) Withholding exemptions. For purposes of this section:\n (1) The number of New York withholding exemptions which an employee\nreceiving wages taxable under this article may claim shall not exceed\nthe number of New York exemptions allowed pursuant to the provisions of\nsection six hundred sixteen and such additional New York withholding\nexemptions as may be prescribed by regulations or instructions of the\ncommissioner of taxation and finance, taking into account the applicable\nstandard deduction and such other factors as he finds appropriate.\n (2) The amount of each New York withholding exemption shall be the\namount of the New York exemption allowed pursuant to the provisions of\nsection six hundred sixteen.\n (3) Withholding exemption certificate. An employee shall be required\nto file with his employer a withholding exemption certificate in accor-\ndance with regulations or instructions prescribed by the commissioner of\ntaxation and finance.\n