Interstate rail, motor, and motor private carriers

Because of the provisions of federal law, compensation paid by an interstate rail, motor, or motor private carrier to an employee who performs regularly assigned duties in two or more states is subject to state and local income taxes only in the employee’s state of residence.

Resident – An employer who is an interstate rail, motor, or motor private carrier must withhold New York State (and New York City or Yonkers, if applicable) income tax on the entire amount of compensation paid to an employee who is a New York State resident.

Nonresident – If an employee of one of the above carriers is a nonresident for income tax purposes and is paid compensation for regularly assigned duties performed in New York State and one or more other states, the compensation is not considered to be income derived from New York State (and New York City or Yonkers, if applicable) sources and is not subject to state or city taxes, even though the employee performed services in New York State.

An employer who is an interstate rail, motor, or motor private carrier should not withhold New York State, New York City, or Yonkers taxes on compensation paid to employees who are New York State nonresidents who perform their regularly assigned duties in New York State and one or more other states.

However, a nonresident employee of an interstate rail, motor, or motor private carrier may request New York State, New York City, or Yonkers withholding. See part R, Voluntary withholding agreements .