K. Form IT-2104.1, New York State, City of New York, and City of Yonkers Certificate of Nonresidence and Allocation of Withholding Tax

Nonresident employees use Form IT-2104.1 to certify to the employer that the employee is not a resident of New York State, New York City, or Yonkers, and to estimate the percentage of the employee’s wages and other compensation (including salaries, vacation allowances, bonuses, commissions, fringe benefits, and deferred compensation, or compensation from nonstatutory stock options) attributable to services performed in New York State for purposes of withholding New York State income tax, New York City income tax, Yonkers resident tax surcharge, and Yonkers nonresident earnings tax. An employer may not accept a Form IT-2104.1 that claims zero percent allocation if any part of the employee’s wages or other compensation is attributable to services performed in New York State or Yonkers.

An employer may rely on a Form IT-2104.1 submitted by an employee, as long as the employer does not have actual knowledge or reason to know that the Form IT-2104.1 is or has become incorrect or unreliable. If an employer has actual knowledge or reason to know that the Form IT-2104.1 is or has become incorrect or unreliable, the employer should re-determine the proper amount of withholding using the rules described in this publication for resident and nonresident employees.

Actual knowledge or reason to know means the knowledge of relevant facts or statements contained in Form IT-2104.1 is such that a reasonably prudent person in the position of the employer would question the claim(s) made on the form. For example, an employer would be deemed to have actual knowledge or reason to know that Form IT-2104.1 has become incorrect if there had been a significant change in the employee’s work assignment, or the employee gives the employer information which indicates the employee has become a New York State resident. Significant changes in work assignment include, but are not limited to: promotions, change of primary work location (either permanent or for a significant temporary period) and a change in duties. The actual knowledge or reason to know standard does not require that an employer make adjustments based on the day-to-day activity of the employee. The standard does, however, require that an employer stop relying on a Form IT-2104.1 if there has been a significant change to the employee’s work assignment.

In addition, if any part of the employee’s deferred compensation or compensation from nonstatutory stock options is attributable to services performed in New York State or Yonkers in the current year or in a previous year or years, the employer may not accept a Form IT-2104.1 that claims 0% allocation. For more information on withholding from deferred compensation and nonstatutory stock options, see part L, Deferred compensation and compensation from nonstatutory stock options .