As a New York business owner, you probably have questions about the IT-2104 form. And you're not alone. The IT-2104 is a common topic of questions from New York businesses.
This article was designed to provide answers to the most common questions we get about the IT-2014 form.
In this article, you'll find:
Let's go.
New York State law requires each employee to fill out an IT-2104 form, so employers can withhold the correct amount of taxes from their paychecks.
The IT-2104 form is an essential document for New York employers when it comes to payroll administration. It is used to determine the amount of state income tax that should be withheld from each employee's paycheck.
This form, which is similar to a W4 for federal withholding taxes, provides information like filing status and allowances so that the right amount of taxes can be taken out of each paycheck.
It is important for employers to use the IT-2104 form when adding a new employee to your payroll, as it ensures that the correct amount of state income tax will be withheld from their earnings. Therefore, employers should provide this form to all new hires in order to comply with state tax regulations.
Are you familiar with the IT-2104 form? Are you using it for your payroll administration process?
If not, make sure to look into this important document as soon as possible. It is essential in order to ensure that your employees' taxes are being withheld correctly.
The recent changes to the W4 form have made it necessary for employers to also use the IT-2104 form.
This is because the information that was previously redundant between the two forms is now different, and employers need to ask for both sets of data in order to properly withhold taxes from each paycheck. Therefore, you should now require the IT-2104 form in order to ensure that you are withholding the right amount of state taxes from your employees' paychecks.
By using the IT-2104 form, you can be confident that your payroll administration process is compliant with state tax regulations and that all of your employees have the correct amount of taxes withheld from their earnings. So, ensure you look into this important document now and ensure your payroll process is up to date.
Filling out the IT-2104 form is actually quite simple. All you have to do is provide some basic information about yourself, including your name, address, and Social Security number. Then, you'll need to select what category best describes your financial situation. You can choose from a list of options such as single with no dependents, married with three kids, or self-employed.
In sections 3, 4, and 5, you can also input additional amounts that should be taken out of each paycheck. This feature is especially useful if you want to pay off any owed taxes ahead of time without having to worry about incurring late fees or interest.
Once you've filled out all the necessary information, you simply have to submit the form and wait for your new tax withholding rate to be applied.
The number of allowances an employee should claim on their IT-2104 form will depend on their individual financial situation. But in general, the more withholding allowances an employee claims, the lower their New York income tax deduction will be from each paycheck.
And in order to determine the best number of allowances for each employee, you should encourage them to talk to their accountants or at least use the IRS's withholding estimator. This tool can help them to estimate their tax obligation and determine the right number of allowances for them to claim.
It is important to note that while claiming more allowances may mean a lower tax deduction from each paycheck, it could also result in a larger amount owed at the end of the year. Therefore, be sure to inform your employees that they should use the withholding calculator regularly and adjust their allowances if necessary.
On the surface, these forms can seem complicated but don’t panic. We created a step-by-step guide to fill out the IT-2104.
Fill out this form to receive your guide in your email.
The purpose of the IT-2104 is to instruct the employer (that’s you!) on how much New York State (and New York City and Yonkers) taxes they should withhold from their employee’s pay. The more allowances claimed, the lower the amount of tax will be withheld.
An IT-2104 form should be filled out every time your company hires a new employee. Filling out these forms properly can save you big headaches down the road come tax filing season.
There are many possible pitfalls to filling out withholding forms properly. For example, if you claim more than 14 allowances, you will have to fill out a withholding certificate affirmation.
Step 1: On the first section of the first page (as shown above) enter the new employee’s information, including their first & last name, social, address, and whether they are single, filing single, or filing jointly with their spouse.
Step 2: In the next section (shown above) simply check whether you are a New York City resident, and whether you live in Yonkers, the 4th largest city in West Chester County.
Step 3: Be sure you are on page 4 part 1 (shown above), as this will help fill out page 1, part 3 of the IT-2104.
Step 4: If your employer participates in the Employer Compensation Expense Program, you have to fill out lines 24-28 to complete line 17.
Step 5: This step is ONLY necessary if you expect to have itemized deductions on your state return.
Step 6: Now for the fun part. Go back to part 1 of page 4 (as shown above) and add lines 6 – 18. Put the sum of all those numbers into line 19. Don’t celebrate just yet though, we are not finished. If you are married, and you and your spouse both work, check your withholding amount before proceeding to the next step.
Step 7: This step will determine your withholding allowances for New York City.
Step 8: Here you can elect to have additional withholdings every pay period for an amount agreed upon with your employer.
Step 9: Now for the easy part. Sign and date it. If Jimmy can do it, anyone can.
Step 10: The good news is, if you are an employee, you can leave this section for your employer. If you are a business filling this out for an employee however, then you will need to check whether they claimed more than 14 exemptions. If they have, they will have to fill out a withholding certificate of affirmation. Note that whether they are a completely new hire, or have been hired before, they still should fill out an IT-2104.
Be sure to include the employee’s starting date, as well as if they get health benefits, and when they will be eligible for them.
The final step (yes we are finally here) is to put your company’s name, address, and Employer Identification Number.
That’s it! You did it! Congratulations. Still have some questions/concerns? Check out our FAQ below.
The IT-2104 Worksheet is designed to help you improve your withholding allowance accuracy. Simply follow the Worksheet guidelines. The goal is to not under or over withhold income taxes from your employee wages in New York State, New York City, and Yonkers.
Then the employer will withhold single with zero allowances. The reason for this is that it will result in the most taxes withheld and prevent the employer from getting in trouble for not withholding enough New York State taxes.
There are several different types of IT-2104 forms for the 2021-2022 tax periods. Most people will use the IT-2104 Employee’s Withholding Allowance Certificate.
Other types of IT-2104 forms are:
The W-4 is for withholding federal income tax, and the IT-2104 is for withholding New York State income tax.
Both forms are needed due to the W-4 redesign. Prior to the redesign, the forms mimicked each other and contained the same information. To withhold state tax correctly, the IT-2104 answers questions such as marital status, number of allowances/exemptions, and more. Without this vital information, employees will have too much, or too little withheld from their paychecks.
Two major reasons the form was redesigned were to accommodate people with multiple jobs and people with other non-job incomes.
Check out this video titled Drastically Different W4 for 2021 to learn more:
Good question. People often assume that because the W-4 form was redesigned, they must now submit the new form. Fortunately, employees who have furnished the W-4 form prior to 2020 don’t have to supply the new form. However, it’s important to note that every time an employee switches jobs, a new W-4 must be submitted.
We hear that every day. Making sure your W-4 and IT-2104 forms, are up to date, properly filled out, and submitted correctly is important to the welfare of your employees, and your business.
Staying on top of all the new regulations is time-consuming, and stressful. Fortunately, payroll companies such as ours, Baron Payroll, are IRS and New York State compliance experts. We think of every new form and regulation as clouds with silver linings. Our passion is finding these silver linings, and helping your business make the most of them.