You may face the federal unemployment tax if you pay $1,500 or more in wages to an employee. Employers should take care to track the wages paid to employees to ensure that they do not forget to file Form 940.

Income Tax Withholding Laws

New York requires that employers withhold state income tax from the wages of employees. New York employers are required to provide these amounts to the Department of Taxation and Finance. If an employer fails to provide these amounts to the Department, then he or she may face charges of tax evasion or fraud.

Payment of Income Taxes

Individuals who reside in New York City will be required to pay several taxes at the local, state and federal level. The tax rate for those who live in New York City is 2.907 to 3.648 percent. An individual may face various taxation rates depending on his or her filing status. New York State also has various income tax percentages that are applicable for a person depending on his or her income level. These tax percentages range from four to eight percent. Those who earn under $16,450 will be required to pay a state tax of 4.5 percent. Those who earn approximately over $2 million a year will be required to pay a state tax of about 8 percent. One’s tax bracket may also vary depending on whether he or she is filing single or jointly within a marriage. New York State has a total of sixteen different tax brackets that may be applicable for a person. 

In New York, government employees receive access to the New York State Common Retirement Fund (CRF). The CRF is held in trust for over one million employees at the State and local government levels. The fund is comprised of $160.7 billion. The CRF is one of the top-managed funds in the U.S. Pensions are guaranteed for NY government workers based on their peak salaries and the duration of their careers.

New Yorkers should seek to stay updated on changes in the management policies of the CRF. Recently, Governor Andrew Cuomo instituted a policy that will allow local authorities to hold off on pension fund payments so that budget gaps can be met. The CRF is managed by the State Comptroller Thomas P. DiNapoli, and the comptroller has the responsibility of managing the security and investments of the CRF.

Defined Benefit Plans

A defined benefit plan is a traditional type of pension plan. Private companies may administer a direct benefit plan, but they have grown rare in recent years. In a defined benefit plan, the company provides a specified sum to the employee during his or her retirement years. For example, a company may provide a $3,000 pension every month to a retired individual. A defined benefit plan may require that an individual work for a company for a certain number of years before he or she can enjoy the benefits of the pension plan. If the individual quits before this time period, he or she may forfeit any invested pension benefits.