UI, wage reporting, and withholding tax requirements for certain items of income

UI, wage reporting, and withholding tax requirements for certain items of income Income item UI and wage reporting requirement Withholding tax requirement Agricultural wages 1. Cash payments 1. Yes 1. Yes, if wages paid are subject to federal income tax withholding (see federal Publication 51, Circular A, Agricultural Employer’s Tax Guide ). 2. Non-cash payments 2. Yes 2. No Back pay Yes Yes, unless made solely by a labor organization if the individual’s employer is not a party to the back-pay award order. Barter income Yes, if paid as an employee for service in the course of the employee’s business. No Bonuses Yes Yes, if paid as compensation for services performed by the employee for their employer. Cafeteria plans/flexible spending accounts [contributions under IRC § 125(a)] Yes, regardless of whether the employee chooses cash or a qualified benefit. No, if the employee chooses a qualified benefit and it is not subject to federal income tax withholding. Yes, if the employee chooses cash. Cancellation of indebtedness Yes, if for services. No Cash salary Yes Yes, unless any of Forms IT-2104-E , IT-2104-IND , New York State Certificate of Exemption from Withholding (for Native Americans) IT-2104-SNY , or IT-2104-MS , New York State Withholding Exemption Certificate for Military Service Personnel , are filed by the employee claiming exemption from New York State, New York City, and Yonkers income tax withholding. Commissions Yes Yes, if paid as compensation for services performed by the employee for their employer. Compensation attributable to nonstatutory stock options When exercised, the difference between the option price and the fair market value is remuneration. However, if the payment has a condition that is based solely on separation from employment, it may constitute dismissal pay. If it is dismissal pay, it is reportable for UI if liable under the FUTA.* For information on whether the compensation is dismissal pay, contact the Department of Labor Liability and Determination section. See Unemployment insurance issues–where can I find the answers? . Yes Dependent care assistance (limited to $5,000; $2,500 if married filing separately) Yes No, unless federal income tax withholding is required. Disability payments Yes, for first 6 months of payments, if liable under the FUTA.* No, for amounts paid after the first 6 months of payments. Yes, if federal income tax withholding is required. Distribution and dividend pay to corporate officers for services performed Yes Yes, if federal income tax withholding is required. Educational assistance Yes No, unless federal income tax withholding is required. Employee’s distributions from pensions and other retirement plans 1. 401(k) plan 1. No 1. No** 2. 403(b) plan (New York State organization or public school) 2. No 2. No** 3. SEP plan 3. No 3. No** 4. 457 plan (state and local governments) 4. No 4. No** 5. 457 plan (non-governmental tax-exempt entities) 5. No 5. Yes 6. Qualified annuity [403(a) plan] 6. No 6. No** 7. Public employee 414(h) retirement distribution 7. No 7. No 8. New York City IRC § 125 flexible benefits program 8. No 8. No 9. Nonqualified plans 9. No 9. No** Employer’s or employee elective contributions to pensions and other retirement benefits + Employer contributions are subject to UI contributions unless the payment is to a plan to be used exclusively for retirement, sickness, accident, medical, hospital, or death benefits covering all or a class of employees. 1. 401(k) plan 1. Yes+ 1. No, unless subject to federal income tax withholding. 2. 403(b) plan (New York State organization or public school) 2. Yes+ 2. No, unless subject to federal income tax withholding. 3. SEP plan 3. Yes+ 3. No, unless subject to federal income tax withholding. 4. Simple retirement account provided under IRC 408(p) (employee salary reduction or contribution to) 4. Yes+ 4. No 5. 457 plan (state and local governments, and tax-exempt organizations) 5. Yes+ 5. No 6. Qualified annuity [403(a) plan] 6. Yes+ 6. No 7. Public employee 414(h) retirement contributions (members of the New York State and Local Retirement Systems [including the New York State Employees’ Retirement System and the New York State Police and Fire Retirement System], New York State Teachers’ Retirement System, or an Employee of the State or City University of New York who belongs to the TIAA/CREF Optional Retirement System or any Tier member of the New York City Employees’ Retirement System, the New York City Teachers’ Retirement System, the New York City Board of Education Retirement System, Manhattan and Bronx Surface Transit Operating Authority, the New York City Police Pension Fund, or the New York City Fire Department Pension Fund) 7. Yes+ 7. Yes 8. New York City IRC § 125 flexible benefits program (established by New York City and certain other New York City public employers [City University of New York, New York City Health and Hospitals Corporation, New York City Transit Authority, New York City Housing Authority, New York City Off-Track Betting Corporation, New York City Rehabilitation Mortgage Insurance Corporation, New York City Board of Education, New York City School Construction Authority, Manhattan and Bronx Surface Transit Operating Authority, or the Staten Island Rapid Transit Authority], on the employees’ behalf) 8. Yes+ 8. Yes 9. Nonqualified plans 9. Yes+ 9. No, unless subject to federal income tax withholding. Fees 1. Speaker’s 1. No, unless for services as an employee. 1. No 2. Notary public 2. No 2. No 3. Jury or witness 3. No 3. No 4. Election official 4. No, unless for services as an employee. 4. No Fishing-related activities Yes Yes, if subject to federal income tax withholding because it is paid in cash. No, if exempt from federal income tax withholding because the income is derived by Native Americans exercising fishing rights. Fringe benefits (that are not allowed as a deduction from the employee’s federal gross income) 1. Cars provided (personal use) 1. Yes 1. Yes, unless the employer elects not to withhold federal income tax and (1) gives the employee advance written notice of the election, and (2) includes the taxable amount of the benefit as income on the employee’s wage and tax statement. 2. Flights on aircraft furnished by employer 2. Yes 2. Yes 3. Free or discounted commercial flights 3. Yes 3. Yes 4. Discounts on property or services 4. Yes 4. Yes 5. Memberships in social clubs/country clubs 5. Yes 5. Yes 6. Tickets to entertainment or sports events 6. Yes 6. Yes 7. Outplacement services 7. Yes 7. Yes 8. Supper money 8. Yes 8. Yes 9. Reimbursement of employment agency fee 9. Yes 9. Yes 10. Meals and lodging *See federal Publication 15-B, Employer’s Tax Guide to Fringe Benefits . 10. Yes (the reasonable value of any meals, rent, and lodging provided by employers). 10. Yes Gambling winnings 1. New York State Lottery 1. No, for UI purposes. Yes, for wage reporting purposes. 1. Yes, if the winnings are from the New York State Lottery, are paid to an individual, and the proceeds from such wager exceed $5,000. 2. Other 2. No, for UI purposes. Yes, for wage reporting purposes. 2. Yes, if the winnings are from a wagering transaction within New York State and the proceeds from such wager are subject to federal withholding. Group-term life insurance No No, unless federal fringe benefit exclusion rules do not meet all the conditions as described in federal Publication 15-B, Employers Tax Guide to Fringe Benefits . Household help 1. Employee compensation 1. Yes 1. No, unless voluntary agreement to withhold New York State, New York City, or Yonkers tax between employer and employee is in effect. See New York State Tax Department bulletin TB-MU-350 , Hiring Household Help , for more information. 2. Social Security tax payments (employer’s payment of employee’s share) 2. No 2. No Income in respect of a decedent (regardless of whether paid in year of death or year after death) Yes No Insurance proceeds (life insurance, endowment contracts) No No Interest and dividends Yes, if for services. No Interest-free and below-market-interest-rate loans (paid by employer) Yes No IRA contributions No, unless a salary reduction plan. No, regardless of whether the contributions to the plan are deductible or nondeductible from the employee’s federal adjusted gross income. IRA distributions (deductible or nondeductible) No No, if the contributions to the plan were deductible or nondeductible, or if it is a qualified rollover.** No, if it is a lump-sum payment. Lump-sum accumulated sick leave pay Yes Yes Military (payments of wages made to) 1. Residents 1. Yes, for persons who render services for State, National Guard, or Air National Guard as regular state employees. 1. Yes, unless the individual filed Form IT-2104-MS with the employer because they meet the conditions for nonresident status. 2. Nonresidents 2. Yes, for persons who render services for State, National Guard, or Air National Guard as regular state employees. 2. No, unless income is received from a civilian job in New York State during off-duty hours. Moving expense reimbursement Yes, if liable under the FUTA for such payments.* No, unless federal income tax withholding is required. Nontaxable fringes 1. No additional cost services 1. Yes 1. No 2. Qualified employee discounts 2. Yes 2. No 3. Working condition fringes 3. Yes 3. No 4. Minimal value fringes 4. Yes 4. No 5. Qualified transportation fringes 5. Yes 5. No 6. Meals provided on employer’s premises for employer’s convenience *See federal Publication 15-B, Employer’s Tax Guide to Fringe Benefits. 6. Yes 6. No Overtime pay Yes Yes Paid family leave Yes, for premiums paid. No, for benefits. Yes, for premiums paid. No, for benefits. Payments or distributions of deferred compensation No, for UI purposes. Yes, for wage reporting purposes, if the payment or distribution is considered wages for federal income tax purposes. Yes, if the payment or distribution is considered wages for federal income tax purposes. Prizes and awards to employees Yes Yes, unless it is not subject to federal income tax withholding because it is reasonably believed to be excludable as an employee achievement award, qualified scholarship, or fringe benefit. Prize money for recreational bowling No No Retroactive pay increases Yes Yes Salary paid in form other than cash Yes Yes, based on the fair market value of property given as payment. Scholarship and fellowship grants No, unless liable under the FUTA (see federal Publication 15, Circular E ). Yes, if federal income tax withholding is required. Severance and dismissal pay Yes, if liable under the FUTA for such payments.* Yes Sick pay Whether paid by employer or third-party: Yes, for first 6 months of payments (including sickness, accident, or disability), if liable under the FUTA.* No, for amounts paid after the first 6 months of payments. Occupational related workers’ compensation payments are not considered sick pay and are neither reportable nor subject to contributions. Yes, if paid by employer, or employer’s agent.* No, if paid by third-party who is not an agent unless withholding is requested by the employee.* *See federal Publication 15-A, Employer’s Supplemental Tax Guide , for more information. Social Security benefits No No Student wages 1. Elementary and secondary school students 1. Yes, if liable under the FUTA or a governmental entity, Indian tribe, or nonprofit organization (except certain camps; see Covered and excluded employment chart).*** 1. Yes, unless the individual filed Form IT-2104-E with the employer because they meet the conditions for exemption from withholding. 2. College and other students in school beyond high school 2. Yes, unless in a work-study program, or employed by certain camps or the educational institution they are attending (see Covered and excluded employment chart). 2. Yes, unless the individual filed Form IT-2104-E with the employer because they meet the conditions for exemption from withholding. Supplemental unemployment compensation No Yes, to the extent includable in the employee’s New York adjusted gross income or New York source income. Tips (cash) 1. If $20 or more in a month 1. Yes 1. Yes 2. If less than $20 in a month 2. Yes 2. No Unemployment compensation No No, unless requested by claimant. Vacation and holiday pay Yes For UI purposes: vacation and holiday pay affect entitlement. Yes Welfare payments No No Workers’ compensation payments No No *Nonprofit organizations, governmental entities, and Indian tribes are not required to report these items. All other employers may report and pay UI contributions on these items either quarterly or annually (see Annual reports ). However, to satisfy wage reporting requirements, these items must also be reported by such employers quarterly as Other wages on Form NYS-45 (see section 2, part G , Gross wages for purposes of wage reporting ). These items are not used in computing a claimant’s UI benefit rate. **However, New York State, New York City, and Yonkers income tax withholding is required if the payee requests it using Form IT-2104-P . ***Nonprofit organizations, governmental entities, and Indian tribes must report and pay UI contributions on these wages quarterly (Part A of Form NYS-45). All other employers may report and pay UI contributions on these wages either quarterly or annually (see Annual reports ). However, to satisfy wage reporting requirements (Part C of Form NYS-45), all employers must report these wages quarterly as regular wages.