03 February 2016 New York City withholding tables for 2016 are revised Proposed changes to the regulation that provides for the New York City income tax withholding tables effective January 1, 2016 are now released. The rule change benefits taxpayers by providing New York City withholding rates that more accurately reflect the current income tax rates. Had the rule not been promulgated, use of the previous withholding tables could cause under-withholding for some taxpayers. As a result, the New York Department of Taxation and Finance has released an updated Publication NYS-50-T-NYC, New York City Withholding Tax Tables and Methods, for New York City employers, effective for wages paid on or after January 1, 2016. As we reported in Tax Alert 2015-817, Part B of Chapter 59 of the Laws of 2015 increased the rate of New York City personal income tax applicable to income over $500,000. Revised withholding tax computations were issued effective June 1, 2015. Because the income tax changes made by Chapter 59 relate to taxpayers with incomes over $500,000, only the percentage method tables (Method II, Exact Calculation Method) were affected, the wage bracket table method (Method I) tables were not. The newly released revised percentage method tables (Method II, Exact Calculation Method) are implemented over a twelve month period for the 2016 tax year, rather than the shorter implementation period required for tax year 2015. Accordingly, effective for payrolls made on or after January 1, 2016, employers that elect (or are required) to use Method II, Exact Calculation Method, must use the revised exact calculation method(s) in the revised Publication NYS-50-T-NYC due to changes in the line 7, Column 5 amounts in each of the tables.
Document ID: 2016-0241 | ||||||||||||||||||||
