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Income Tax Withholding
Employee Withholding Allowance Certificates:
The employees' withholding allowance certificates are the W-4 and the IT-2104. The federal withholding allowance certificate is form W-4 and is filed with the Internal Revenue Service (IRS). The state and the city withholding allowance certificate is the form IT-2104 and is filed with the New York State (NYS) Department of Taxation and Finance. The marital status and number of allowances you claim on these certificates determines the amount of income taxes that are withheld from your wages. Click here to update your tax withholdings.
However, you must file new forms whenever your income tax situation changes; for instance:
- When your marital status or number of dependents change
- When you owe income tax or receive a large refund when you file your personal income tax return
- If you have another job or investment that causes your total income for the year to be significantly higher or lower
- When your itemized deductions change
If you wish to claim a different number of allowances or marital status for New York State and City income tax withholding than what you have claimed on your federal form W-4, Click here to complete and submit the New York State IT-2104 online through Employee Self Service.
The IRS expects NYC Health + Hospitals to ensure each employee acts responsibly with regard to having their income taxes accurately withheld. If you submit an invalid withholding form, it will not be honored, and you will be advised to submit a valid form. If you do not submit a valid form, NYC Health + Hospitals will withhold income taxes on the basis of the last valid withholding allowance form submitted by you. If no valid withholding certificate is on file, income taxes will be withheld on the basis of a tax status of single, with zero allowances.
Invalid certificates include:
- forms with unauthorized changes or additions
- forms that are incomplete or unsigned
- forms your facility considers to be false, fraudulent or frivolous.
forms filed as a tax protester. NYC Health + Hospitals does not condone the filing of tax protester withholding certificates. Copies of forms and related documentation in this category will be submitted to Corporate Payroll Services, which will forward the forms to the IRS and/or New York State Department of Taxation and Finance for a determination as to whether the form should be honored. The facility will also forward copies of the forms and documentation to NYC Health + Hospitals' Office of the Inspector General for an appropriate course of action.
Ideally, your total annual withholdings should match your actual income tax liability. If not enough income tax is withheld, you will owe income tax at the end of the year and may have to pay interest and a penalty. If too much income tax is withheld, you will lose the use of that money until you receive your refund.
- Decreasing the number of allowances you claim on form W-4, line 5, or
- Entering a specific additional dollar amount you want withheld from each paycheck on form W-4, line 6. This amount is in addition to what is calculated and withheld based on your marital status and the number of allowances you have claimed on form W-4, line 5.
- Increase the number of allowances you claim on form W-4, line 5, and
- Make sure no additional dollar amount is claimed on form W-4, line 6.
Frequent changes in allowances - especially those requested in anticipation of large or special payments such as Back Pay and Uniform Allowance - may result in under withholding of your income tax obligation. Under withholding may result in year end income tax liabilities and/or penalties to you.
However non-resident aliens, in order to avoid under withholding of income taxes, are subject to certain restrictions when completing a form W-4. Non-resident aliens
- cannot claim exemption from income tax withholding
- must request “single” withholding, regardless of their actual marital status
- cannot claim more than one exemption allowance **
- must write “Non-Resident Alien” or “NRA” above the dotted line on line 6 of the form W-4.
- 31 days during the current year, and
- 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
– All the days you were present in the current year, and
– 1/3 of the days you were present in the first year before the current year, and
– 1/6 of the days you were present in the second year before the current year.
See IRS Pub. 519 US Tax Guide for Aliens
See IRS Pub. 515 Tax Withholding, Non-Resident Aliens
See IRS Notice 1392 Supplemental Form W-4 Instructions For Non-Resident Aliens
Download IRS Form 8233 Non-Resident Withholding Exemption
Claiming More than 10 Federal & 14 State Allowances:
You may file withholding certificates with as many allowances as are justified by your circumstances. If you claim more than 10 withholding allowances on your form W-4 or more than 14 allowances on your form IT-2104, you must complete a signed, notarized and unaltered Withholding Certificate Affirmation.
• The prior year's income tax returns
• Proof of qualifying home mortgage interest
• Charitable contributions
• State and local income taxes (but not sales tax)
• Medical expenses as stipulated in IRS guidelines
• Number of dependents
• Other qualifying miscellaneous deductions
• A letter from you to the facility’s Human Resources Director stating your circumstances
Corporate Payroll Operations forwards the documents to the IRS or NYS Department of Taxation and Finance as appropriate. In some cases, the IRS or NYS may instruct NYC Health + Hospitals to change your number of withholding allowances or marital status through Lock-in-Letters.
The IRS or NYS may instruct NYC Health + Hospitals to implement a prescribed number of withholding allowances or a particular marital status for you via a Lock-in Letter. Corporate Payroll Operations will advise your facility’s Human Resources Department to change your allowances or marital status. The original letter from IRS or NYS will be sent to your facility’s Human Resources Department, who will in turn, give a copy to you. Your exemptions or marital status are then "locked-in" until further changes are received from the IRS or NYS.
Subsequent changes initiated by you will be made only if you submit new form(s) W-4/IT-2104 where you are not claiming withholding exempt status or where the number of allowances is equal to or fewer than the number in the Lock-in Letter.
If you receive a Lock-in Letter and believe that your circumstances justify additional allowances or full withholding exemption, you should contact the IRS or NYS directly.
The majority of NYC Health + Hospital employees are required to have income taxes withheld. No employees, including students, are automatically exempt from income tax liability.
You CAN NOT claim exemption from federal withholding income taxes for the current year if:
- your income exceeds $1,000 and includes more than $350 of unearned income (interest and dividends), and
- another person can claim you as a dependent on his/her tax return
However, there are some circumstances, which may entitle you to be fully income tax exempt. In order to be exempt from federal withholding taxes, you must verify on the form W-4 that you meet BOTH of the following conditions:
- Last year you had a right to a refund of ALL federal income tax withholding because you had no tax liability AND
- This year you expect a refund of ALL federal income tax withheld because you expect to have no tax liability
Exemptions From N.Y. State & City Withholding
In order to claim exemption from New York State and City withholding income taxes you must meet ALL of the following conditions:
- You are
- under age 18 OR
- are a full time student under age 25 OR
- are over age 65
- You had no New York income tax liability for the previous calendar year
- You do not expect to have a New York income tax liability for the current calendar year
Please note: Generally, as a New York State resident, you are required to file a New York State income tax return if you are required to file a federal income tax return, or if your adjusted federal gross income plus your New York State additions (i.e. 414(h) pension contributions, IRC 125 health deductions, etc.) are more than $4,000. However, if you are single and can be claimed as a dependent on another person’s federal return, you must file a New York State income tax return if your adjusted federal gross income plus your New York State additions (i.e. 414(h) pension contributions, IRC 125 health deductions, etc.) is more than $3,000.
Both forms W-4 and IT-2104E claim exemption from withholding and expire each year.
If you continue to meet the exemption criteria set forth above, you must submit new form(s)W-4 and/or IT-2104E annually in order to continue your income tax exempt status:
- File a new form W-4 by February 16th to continue to claim exemption from federal withholding AND/OR
- File a new form IT-2104E by April 30th to continue to claim exemption from New York State and City withholding
The maximum wage base for social security is adjusted each year and is shown below for the past five years:
In most cases, employees in the United States pay social security and Medicare taxes. Your employer deducts these taxes from each wage payment. NYC Health + Hospitals must deduct these taxes even if you do not expect to qualify for social security or Medicare benefits. Employees and employers each pay 7.65% of payroll covered wages for social security and Medicare taxes. Together these taxes comprise FICA (Federal Insurance Contributions Act) withholdings.
Employees with J1 and F1 visas, and Group 12 employees in competitive titles who are US Citizens, may be eligible for exemption from mandatory social security taxes if they meet specific criteria. If you fall into one of these groups and want to know if you qualify, contact the Human Resources of your facility to see if you are eligible.
Domestic Partner Health Benefits
Tax implications of adding a domestic partner to your health plan: The cost of the premium for the health benefits provided to your domestic partner is additional income to you and is subject to Federal, State, Local, Social Security and Medicare taxes. The additional income, attributable to the adding of a domestic partner, is comprised of three parts which will be added to your NYC Health + Hospitals Wage and Tax Statement for each full or partial calendar year in which you have a domestic partner on your health plan:
(1) The value of basic health benefits paid by NYC Health + Hospitals for coverage of your domestic partner. This is the value of the employer premiums paid by NYC Health + Hospitals for individual coverage under the employee's designated health plan.
(2) The additional amount of the employee health deduction taken from your payroll checks (individual verses family health deductions) for coverage for your domestic partner. The portion of the employee health deduction added for coverage of your domestic partner is not an eligible IRC 125 deduction.
(3) The value of health insurance benefits provided to your domestic partner by your Welfare Fund. This amount is calculated directly by the respective Welfare Fund. The Welfare Fund reports this amount to NYC Health + Hospitals for inclusion in your NYC Health + Hospitals W-2.