New York State nonresident employees

Deferred compensation and compensation attributable to nonstatutory stock options that are considered wages for federal income tax purposes are subject to withholding if the compensation is attributable to services performed in New York State. This rule also applies to Yonkers nonresident earnings tax withholding if the compensation is attributable to services performed in Yonkers.

See TSB-M-10(9)I , Income Received by a Nonresident Related to a Business, Trade, Profession, or Occupation Previously Carried on Within New York State , for information on income from activity previously carried on in New York State and see TSB-M-07(7)I , New York State Tax Treatment of Stock Options, Restricted Stock, and Stock Appreciation Rights Received by Nonresidents and Part-Year Residents , for information on compensation attributable to nonstatutory stock options.

Note: Distributions from nonqualified deferred compensation plans to nonresidents of New York State, that meet the definition of retirement income under § 114(b) of Title 4 of the US code, are not subject to New York State income tax. Therefore, such distributions are not subject to New York State, New York City, or Yonkers withholding tax.