N.Y. Comp. Codes R. & Regs. tit. 20 § 171.6

Current through Register Vol. 46, No. 25, June 18, 2024

Section 171.6 - Determining New York State personal income tax to be withheld on wages paid to nonresident of New York State

(a) General. An employer must deduct and withhold New York State personal income tax on all wages paid to an employee who is a nonresident of New York State for services performed in New York State. The New York State personal income tax to be deducted and withheld is to be determined in accordance with section 171.4 of this Part, Appendix 10 of this Title, and this section. If the services of a nonresident employee are performed entirely in New York State, the employer must deduct and withhold New York State personal income tax from all wages paid to such employee. Wages paid to a nonresident employee for personal services rendered entirely without New York State are not subject to withholding of New York State personal income tax.

(b) Income of a nonresident for services performed partly within and partly without New York State.

(1) If a nonresident employee performs services partly within and partly without New York State, such nonresident employee should file a Certificate of Nonresidence and Allocation of Withholding Tax (form IT-2104.1) for the purposes indicated in paragraphs (2) and (3) of this subdivision.

(2) The employer should withhold New York State personal income tax on the basis of the apportionment shown by the nonresident employee on form IT-2104.1, but must nevertheless make necessary adjustments during the year so that the proper amount of New York State personal income tax is withheld from the employee's wages. For the purpose of making these adjustments, the proportion of remuneration which is paid for services rendered within New York State is to be determined as follows:

(i) If the services are rendered by a traveling salesman, agent or other employee whose compensation on the basis of commissions depends directly on the volume of business transacted by such employee, the amount attributable to services within New York State is that proportion of the compensation received which the volume of business transacted by the employee within New York State bears to the volume of business transacted by the employee within and without New York State.

(ii) With respect to all other employees, the amount of wages attributable to services within New York State is that proportion of the total compensation which the total number of working days employed within New York State bears to the total number of working days employed both within and without New York State, exclusive of nonworking days. Nonworking days usually include Saturdays, Sundays, holidays, and days of absence because of illness, personal injury, vacation or leave with or without pay.

(3) The portion of wages allocable to New York State may be determined by the employer on the basis of the preceding year's experience, except that the employer must make any necessary adjustments during the year to insure that the required New York State personal income tax is withheld for the current year. If the employee reasonably expects that the preceding year's experience will not be applicable to the current year, he may furnish to his employer a certificate on form IT-2104.1, estimating the proportion of his wages allocable to New York State, or the employer himself may make such estimate and may then withhold New York State personal income tax on the basis thereof; in either case, however, the employer is required to make the necessary adjustments during the year so that the proper amount of New York State personal income tax is withheld from the employee's salary for the current year.

(4) Where a nonresident employee will work only a short period of time within New York State and it is reasonably expected that the total wages of such nonresident employee for services rendered within New York State will not exceed the amount of such employee's personal exemptions, the employer need not withhold or deduct any amount of New York State personal income tax from such employee's wages until the aggregate amount paid to such employee exceeds the amount of such employee's personal exemptions.

(5) An employer is required to withhold New York State personal income tax on all wages paid to a nonresident employee who works partly within and partly without New York State, unless there is filed with such employer a Certificate of Nonresidence and Allocation of Withholding Tax on form IT-2104.1, or unless the employer maintains adequate current records to determine accurately the amount of wages from New York State sources. The mere filing of the certificate on form IT-2104.1 does not, however, relieve the employer from the duty of withholding the proper amount of New York State personal income tax from wages paid to an employee. Form IT-2104.1 must be retained by the employer and must be available for inspection by representatives of the Tax Commission.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 171.6