GARDEN CITY, NEW YORK — With New York Governor Andrew Cuomo proposing to give companies the option to enter into the payroll tax system as a way to protect employees, who reside in higher-taxed areas of the state, from paying more in taxes, Thomas R. Fazio, Partner, Blodnick Fazio & Associates PC, says that the employers should consult with a business law attorney before enrolling in the program.
On February 12, Governor Cuomo proposed a payroll tax system in which companies can voluntarily join so that their employees are protected from federal tax increases. According to the governor, this would benefit workers who live in high-tax areas and are now affected by the federal tax law because the state and local tax (SALT) deductions have been capped at $10,000.
Under the program, participating employers would be assessed a payroll tax on wages greater than $40,000 a year. The program would be phased in over three years, starting in 2019: 1.5 percent the first year, 3 percent the second year, and 5 percent the third year. In return, companies would receive a tax credit to make up for the associated costs. Employees would not see a decrease in their take-home pay.
“There may be some benefits to this program, but the addition of another proposed tax on top of the other taxes that companies have to pay can make this more confusing,” Mr. Fazio says. “It is important that, before making the move to enroll, employers should consult a business law attorney to determine if this is the proper course of action to take.”
For more information, call (516) 280-7105 or visit www.blodnickfaziolaw.com.