Undercollections

If less than the correct amount of New York State, New York City (if applicable), and Yonkers (if applicable) income tax is deducted from any wage payment made to an employee, the employer is allowed to deduct the amount of the undercollection from later wage payments made to the employee in the same calendar year.

However, the employer is responsible for any underpayment of New York State, New York City (if applicable), and Yonkers (if applicable) personal income tax. Reimbursement by the employee is a matter to be resolved between the employer and employee.

Even if the employee pays any tax due with their New York State personal income tax return filed for the same calendar year, the employer may still be subject to penalties, interest, and additions to tax for failure to deduct and withhold. If you discover an undercollection, you must make the appropriate correction indicated below.

Undercollection discovered prior to filing Form NYS-45 for the same calendar quarter If you had previously filed Form(s) NYS-1 during the calendar quarter to pay income tax withheld and you have not yet filed Form NYS-45 for the quarter, you must correct the underpayment by making an additional payment with Form NYS-1 before the end of the calendar quarter (see Form NYS-1-I , Instructions for Form NYS-1); or If you did not file any Form(s) NYS-1 because you did not accumulate at least $700 in withholding (New York State, New York City, and Yonkers) and you have not yet filed Form NYS-45 for the quarter, you must correct the undercollection by including the amount of the undercollection as income tax withheld on Form NYS-45 and remitting the total amount required to be withheld with the quarterly return.

Undercollection discovered in a subsequent calendar quarter If you discover an undercollection after the calendar quarter in which it occurred, but prior to filing Form NYS-45 for the final quarter of the same calendar year, you must file an amended quarterly return on Form NYS-45 for the quarter in which the underpayment occurred. For more information, see Form NYS-45-I, Instructions for Form NYS-45.