TAF-39-09-00003-P New York State and City of Yonkers Withholding Tables and Other Methods  

  • 9/30/09 N.Y. St. Reg. TAF-39-09-00003-P
    NEW YORK STATE REGISTER
    VOLUME XXXI, ISSUE 39
    September 30, 2009
    RULE MAKING ACTIVITIES
    DEPARTMENT OF TAXATION AND FINANCE
    PROPOSED RULE MAKING
    NO HEARING(S) SCHEDULED
     
    I.D No. TAF-39-09-00003-P
    New York State and City of Yonkers Withholding Tables and Other Methods
    PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
    Proposed Action:
    Amendment of sections 171.4(b)(1), 251.1(b) and Appendixes 10 and 10-A of Title 20 NYCRR.
    Statutory authority:
    Tax Law, sections 171, subdivision First; 671(a)(1); 697(a); 1329(a); and 1332(a); Codes and Ordinances of the City of Yonkers, sections 15-105 and 15-108(a); L. 2009, ch. 57, Part Z-1, section 5
    Subject:
    New York State and City of Yonkers withholding tables and other methods.
    Purpose:
    To provide current New York State and City of Yonkers withholding tables and other methods.
    Substance of proposed rule (Full text is posted at the following State website:www.tax.state.ny.us):
    Section 671(a)(1) and section 1329 of the Tax Law mandate that employers withhold from employee wages amounts that are substantially equivalent to the amount of New York State personal income tax and City of Yonkers income tax surcharge reasonably estimated to be due for the taxable year. The provisions authorize the Commissioner of Taxation and Finance to provide for withholding of these taxes through regulations promulgated by the Commissioner.
    This rule amends Appendixes 10 and 10-A of Title 20 NYCRR, replacing pages T-13, T-14, and T-14-A, Method II: Exact Calculation Method (Single, Married, and Examples, respectively) of Appendix 10, New York State Income Tax Withholding Tables and Other Methods, and pages T-57, T-58, and T-58-A, Method II: Exact Calculation Method (Single, Married, and Examples, respectively) of Appendix 10-A, City of Yonkers Income Tax Surcharge on Residents and Earnings Tax on Nonresidents Withholding Tables and Other Methods of such Title to provide new New York State and City of Yonkers withholding tables and other methods. The amendments to the Appendixes reflect the limitation of itemized deductions and the revision of the New York State and City of Yonkers tax tables and tax table benefit recapture enacted by Chapter 57 of the Laws of 2009, implemented over a twelve month period rather than the shorter implementation period required for tax year 2009. This rule also adjusts the New York State and City of Yonkers supplemental withholding tax rates to reflect the twelve-month implementation period to be applied to supplemental wage payments, rather than the shorter period for tax year 2009.
    The rule applies to wages and other compensation subject to withholding paid on or after January 1, 2010.
    Text of proposed rule and any required statements and analyses may be obtained from:
    John W. Bartlett, Tax Regulations Specialist 4, Department of Taxation and Finance, Taxpayer Guidance Division, Building 9, W. A. Harriman Campus, Albany, NY 12227, (518) 457-2254, email: tax_regulations@tax.state.ny.us
    Data, views or arguments may be submitted to:
    Same as above.
    Public comment will be received until:
    45 days after publication of this notice.
    Regulatory Impact Statement
    1. Statutory authority: Tax Law, section 171, subdivision First, generally authorizes the Commissioner of Taxation and Finance to promulgate regulations; section 671(a)(1) provides that the method of determining the amounts of New York State personal income tax to be withheld will be prescribed by regulations promulgated by the Commissioner; section 697(a) provides the authority for the Commissioner to make such rules and regulations as are necessary to enforce the personal income tax; section 1329(a) of the Tax Law and section 15-105 of the Codes and Ordinances of the City of Yonkers provide that the City of Yonkers Income Tax Surcharge shall be withheld in the same manner and form as that required by sections 671 through 678 of the Tax Law, except where noted; section 1332(a) of the Tax Law and section 15-108(a) of the Codes and Ordinances of the City of Yonkers provide that the City of Yonkers Income Tax Surcharge shall be administered and collected by the Commissioner of Taxation and Finance in the same manner as the tax imposed by Article 22 of the Tax Law. Section 5 of Part Z-1 of Chapter 57 of the Laws of 2009 requires the Commissioner to adopt rules to implement changes in the withholding tax tables and methods relating to the changes made by Part Z-1.
    2. Legislative objectives: The proposal amends the appendixes related to the exact calculation method (Method II) for New York State income tax withholding purposes and for City of Yonkers income tax surcharge purposes to adjust the withholding tables and methods to implement the changes necessitated by Chapter 57 of the Laws of 2009 applicable to wages and other compensation paid on or after January 1, 2010. The amendments implement revised New York State and City of Yonkers withholding tables and other methods. Specifically, the withholding rates reflect the implementation of the changes necessitated by Chapter 57 over a twelve-month period, rather than the shorter implementation period required for tax year 2009. Because the income tax changes made by Chapter 57 relate to taxpayers with incomes over certain amounts, the wage bracket table method (Method I) tables are not affected. Amendments to provisions regarding withholding on supplemental wages are also made to reflect the new rate of withholding implemented over a twelve-month period, rather than the shorter period required for tax year 2009.
    3. Needs and benefits: This rule sets forth amendments to the New York State and City of Yonkers withholding tables and other methods, applicable to wages and other compensation paid on or after January 1, 2010, reflecting the changes necessitated by Chapter 57 of the Laws of 2009. This rule benefits taxpayers by providing New York State and City of Yonkers withholding rates that more accurately reflect the current income tax rates. If this rule is not promulgated, the use of the existing withholding tables would cause some over-withholding for some taxpayers.
    4. Costs: (a) Costs to regulated parties for the implementation and continuing compliance with this rule: Since (i) the Tax Law and the Codes and Ordinances of the City of Yonkers already mandate withholding in amounts that are substantially equivalent to the amounts of New York State and City of Yonkers personal income tax on residents reasonably estimated to be due for the taxable year, and (ii) this rule conforms Appendixes 10 and 10-A of Title 20 NYCRR to the rates of the New York State income tax and the City of Yonkers income tax surcharge on residents, as required by Chapter 57 of the Laws of 2009, any compliance costs to employers associated with implementing the revised withholding tables and other methods are due to such statutes, and not to this rule.
    (b) Costs to this agency, the State and local governments for the implementation and continuation of this rule: Since the need to make amendments to the New York State Personal Income Tax Regulations under Article 22 of the Tax Law, the City of Yonkers Income Tax Surcharge on Residents Regulations, and to Appendixes 10 and 10-A, arises due to the statutory changes in the itemized deductions and rates applied over a twelve-month period, there are no costs to this agency or the State and local governments that are due to the promulgation of this rule.
    (c) Information and methodology: This costs assessment is based on a review of the rule and the statutory requirements and their effect as described above by and discussions among personnel from the Department's Taxpayer Guidance Division, Office of Tax Policy Analysis, Office of Budget and Management Analysis, and Management Analysis and Project Services Bureau.
    5. Local government mandates: Local governments, as employers, would be required to implement the new withholding tables and other methods in the same manner and at the same time as any other employer.
    6. Paperwork: This rule will not require any new forms or information. The reporting requirements for employers are not changed by this rule. Employers will be notified of the amendments to the tables and other methods and directed to the Department's website for the updated tables and other methods.
    7. Duplication: This rule does not duplicate any other requirements.
    8. Alternatives: Since section 671(a) of the Tax Law and Chapter 57 of the Laws of 2009 require that withholding tables and other methods be promulgated, there are no viable alternatives to providing such tables and other methods.
    The following organizations are being given an opportunity to participate in the rule's development: the Association of Towns of New York State; the Office of Coastal, Local Government, and Community Sustainability of the New York State Department of State; the Division for Small Business of Empire State Development; the National Federation of Independent Businesses; the New York State Association of Counties; the New York Conference of Mayors and Municipal Officials; the Small Business Council of the New York State Business Council; the Retail Council of New York State; and the New York Association of Convenience Stores; the Tax Section of the New York State Bar Association; the Association of the Bar of the City of New York; the National Tax Committee for the National Conference of CPA Practitioners; the New York State Society of CPAs; and the Business Council of New York State. No comments were received from any of these parties.
    9. Federal standards: This rule does not exceed any minimum standards of the federal government for the same or similar subject area.
    10. Compliance schedule: The required information will be made available to affected employers in sufficient time to implement the revised New York State and City of Yonkers withholding tables and other methods for wages and other compensation paid on or after January 1, 2010.
    Regulatory Flexibility Analysis
    1. Effect of rule: Small businesses, within the meaning of the State Administrative Procedure Act, that are currently subject to the New York State and City of Yonkers withholding requirements will continue to be subject to these requirements. This rule should, therefore, have little or no effect on small businesses other than the requirement of conforming to the new withholding tables and other methods. All small businesses that are employers or are otherwise subject to the withholding requirements must comply with the provisions of this rule.
    2. Compliance requirements: This rule requires small businesses and local governments that are already subject to the New York State and City of Yonkers withholding requirements to continue to deduct and withhold amounts from employees using the revised New York State and City of Yonkers withholding tables and other methods. The promulgation of this rule will not require small business or local governments to submit any new information, forms, or paperwork.
    3. Professional services: Many small businesses currently utilize bookkeepers, accountants and professional payroll services in order to comply with existing withholding requirements. This rule will not encourage or discourage the use of such services.
    4. Compliance costs: Small businesses and local governments are already subject to the New York State and City of Yonkers withholding requirements. Therefore, small businesses and local governments are accustomed to withholding revisions, including minor programming changes for federal, state, City of New York, and City of Yonkers purposes. As such, these changes should place no additional burdens on small businesses and local governments. See, also, section 4(a) of the Regulatory Impact Statement for this rule.
    5. Economic and technological feasibility: This rule does not impose any economic or technological compliance burdens on small businesses or local governments.
    6. Minimizing adverse impact: Section 671(a)(1) of the Tax Law mandates that New York State withholding tables and other methods be promulgated. Section 1332 of the Tax Law mandates, in part, that the City of Yonkers withholding of tax on wages shall be administered and collected by the Commissioner of Taxation and Finance in the same manner as the tax imposed by Article 22 of the Tax Law. There are no provisions in the Tax Law that exclude small businesses and local governments from the withholding requirements. The regulation provides some relief to small businesses and local government with respect to the methods allowed to comply with the withholding requirements by continuing to provide employers with more than one method of computing the amount to withhold from their employees. Look-up tables are provided for employers who prepare their payrolls manually, and an exact calculation method is provided for employers with computer-based systems.
    7. Small business and local government participation: The following organizations are being given an opportunity to participate in the rule's development: the Association of Towns of New York State; the Office of Coastal, Local Government, and Community Sustainability of the New York State Department of State; the Division for Small Business of Empire State Development; the National Federation of Independent Businesses; the New York State Association of Counties; the New York Conference of Mayors and Municipal Officials; the Small Business Council of the New York State Business Council; the Retail Council of New York State; and the New York Association of Convenience Stores; the Tax Section of the New York State Bar Association; the Association of the Bar of the City of New York; the National Tax Committee for the National Conference of CPA Practitioners; the New York State Society of CPAs; and the Business Council of New York State. No comments were received from any of these parties.
    Rural Area Flexibility Analysis
    1. Types and estimated numbers of rural areas: Every employer, including any public or private employer located in a rural area as defined in section 102(13) of the State Administrative Procedure Act, that is currently subject to the New York State and City of Yonkers withholding requirements will continue to be subject to such requirements and will be required to comply with the provisions of this rule. There are 44 counties throughout this State that are rural areas (having a population of less than 200,000) and 9 more counties having towns that are rural areas (with population densities of 150 or fewer people per square mile).
    2. Reporting, recordkeeping and other compliance requirements; and professional services: This rule requires employers that are already subject to the New York State and City of Yonkers withholding requirements to continue to deduct and withhold amounts from employees using the revised withholding tables and other methods. The promulgation of this rule will not require employers to submit any new information, forms, or other paperwork.
    Further, many employers currently utilize bookkeepers, accountants, and professional payroll services in order to comply with existing withholding requirements. This rule will not encourage or discourage the use of any such services.
    3. Costs: Employers are already subject to the New York State and City of Yonkers withholding requirements. Therefore, employers are accustomed to withholding revisions, including minor programming changes for federal, state, City of New York, and City of Yonkers purposes. As such, these changes should place no additional burdens on employers located in rural areas. See, also, section 4(a) of the Regulatory Impact Statement for this rule.
    4. Minimizing adverse impact: Section 671(a)(1) of the Tax Law mandates that New York State withholding tables and other methods be promulgated. Section 1332 of the Tax Law mandates, in part, that the City of Yonkers withholding of tax on wages shall be administered and collected by the Commissioner of Taxation and Finance in the same manner as the tax imposed by Article 22 of the Tax Law. There are no provisions in the Tax Law that exclude employers located in rural areas from the withholding requirements.
    5. Rural area participation: The following organizations are being given an opportunity to participate in the rule's development: the Association of Towns of New York State; the Office of Coastal, Local Government, and Community Sustainability of New York State Department of State; the Division for Small Business of Empire State Development; the National Federation of Independent Businesses; the New York State Association of Counties; the New York Conference of Mayors and Municipal Officials; the Small Business Council of the New York State Business Council; the Retail Council of New York State; the New York Association of Convenience Stores; the Tax Section of the New York State Bar Association; the Association of the Bar of the City of New York; the National Tax Committee for the National Conference of CPA Practitioners; the New York State Society of CPAs; and the Business Council of New York State. No comments were received from any of these parties.
    Job Impact Statement
    A Job Impact Statement is not being submitted with this rule because it is evident from the subject matter of the rule that it could have no impact on jobs and employment opportunities. The purpose of the rule is to amend the New York State and City of Yonkers withholding tables and other methods, applicable to wages and other compensation paid on or after January 1, 2010, to implement the changes necessitated by Chapter 57 of the Laws of 2009 over a twelve-month period, rather than the shorter period required for tax year 2009. The rule also reflects adjustments to the New York State and City of Yonkers supplemental withholding rates applied to supplemental wage payment.

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