N.Y. Comp. Codes R. & Regs. tit. 20 § 171.7

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

Section 171.7 - Voluntary New York State personal income tax withholding agreements

Tax Law, § 671(a)(2)

(a)General.

An employee and his employer may enter into an agreement, under section 671(a)(2) of the Tax Law, to provide for withholding of New York State personal income tax upon payments made as remuneration for services performed by an employee for his employer which do not constitute wages pursuant to section 171.3 of this Part, but which are includible in the New York adjusted gross income of the employee. Such an agreement must be applicable to all such amounts paid by the employer to the employee. The amount deducted and withheld pursuant to such an agreement between the employer and employee is to be determined under the rules contained in section 671(a)(1) of the Tax Law and the regulations set forth in this Part.

(b)Form and duration of agreement.

(1) Except as provided in paragraph (2) of this subdivision, an employee who desires to enter into an agreement as set forth in this section must furnish such employee's employer with a completed Employee's Withholding Allowance Certificate (form IT-2104). The furnishing of such form IT-2104 constitutes a request for withholding.

(2) In the case of an employee who desires to enter into an agreement as set forth in this section with his employer, if the employee performs services (in addition to those to be the subject of the agreement) the remuneration for which is subject to mandatory New York State personal income tax withholding by such employer, or if the employee wishes to specify that the agreement terminate on a specific date, the employee must furnish the employer with a request for withholding which must be signed by the employee, and must contain:

(i) the name, address, and social security number (see section 158.1(c) of this Title) of the employee making the request;

(ii) the name and address of the employer;

(iii) a statement that the employee desires withholding of New York State personal income tax; and

(iv) if the employee desires that the agreement terminate on a specific date, the date of termination of the agreement.

If accepted by the employer as provided in paragraph (3) of this subdivision, the request must be attached to, and will constitute part of, the employee's Employee's Withholding Allowance Certificate (form IT-2104). An employee who furnishes such employee's employer a request for withholding of New York State personal income tax, as set forth in this section, must also furnish such employer with a completed form IT-2104 if such employee does not already have a form IT-2104 in effect with such employer.

(3) No request for the withholding of New York State personal income tax, as set forth in this section, will be effective as an agreement between an employer and an employee until the employer accepts the request by commencing to withhold New York State personal income tax from the amounts with respect to which the request was made.

(4) An agreement as set forth in this section will be effective for such period as the employer and employee mutually agree upon. However, either the employer or the employee may terminate the agreement prior to the end of such period by furnishing a signed written notice to the other. Unless the employer and employee agree on an earlier termination date, the notice will be effective with respect to the first payment of an amount in respect of which the agreement is in effect which is made on or after the first Federal status determination date (January first, May first, July first and October first of each year) that occurs at least 30 days after the date on which the notice is furnished. If the employee executes a new form IT-2104, the request upon which an agreement as set forth in this section is based must be attached to, and constitute a part of, such new form IT-2104.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 171.7