I know the basic rule: if you’re a New York City resident, you pay the city personal income tax even if your desk is technically outside the five boroughs. But my payroll situation is making me second-guess how this actually gets paid, and whether I’m supposed to paper over the gap myself.

I live in Washington Heights. My company is based in White Plains. I’ve been remote since before I moved into the city last spring, and my payroll records show my home address as New York City, but the work location is listed as White Plains/telecommute, and there is no New York City locality line on my check. I asked HR about city withholding. They said the company is not located in New York City, so they do not withhold city tax. That sounds half true but not entirely reassuring.

What I think is happening: I will file a New York State resident return, and because I’m a New York City resident, I’ll owe the city tax at filing. Since nothing was withheld for NYC, I may also owe an underpayment penalty unless I meet a safe harbor or make estimated payments. My questions:

1. Is the employer actually required to withhold NYC income tax for a full-time remote employee who lives in Manhattan and never sets foot in White Plains? Or are they just allowed to decline?
2. If they won’t withhold, should I start making quarterly estimated payments to New York State/NYC now, or can I just pay when I file next April?
3. Has anyone gotten a suburban payroll provider to add a local New York City withholding code without changing the work location?

I’d rather not float the city an interest-free loan, but I also don’t want a surprise notice next summer. If there’s a specific form to point payroll to, that would help.

Brother you owe the city if you live in the city, full stop. White Plains people are always like “we’re not NYC” and technically true but your residency is what matters. They don’t have to withhold if they don’t want to? I think they can withhold as a courtesy. My old job in Jersey City did after I asked twice. For now put aside a little each check and make an estimated payment. You’ll get hit with interest if you wait until April, maybe not huge but why give them the excuse.

Unpopular opinion but the employer might actually be right that they have no withholding requirement if they have no employees working in the city and no office here. That doesn’t mean you don’t owe the tax, it just means you’re responsible for paying it. You should absolutely look at the safe harbor rules before deciding to send estimated payments. If your withholding from NYS ends up at least equal to last year’s total tax, you might avoid underpayment penalty. But the key is whether your NYS withholding is enough to cover both state and city liability; if not, then yes, estimated payments are probably the cleanest way. Also confirm you’re not accidentally “remote” in Westchester for payroll allocation, because that can affect what’s reported in the state and local boxes on your W-2.

I had this exact thing with a Jersey City employer. They said no local tax because no NYC location. I had to fill out the state withholding form and write “New York City resident” in the local box. Took one pay period after I got someone on the phone. The payroll rep kept saying “but you don’t work in NYC” until I read them the line about residency from the state website. They won’t care until you make them.

Thanks for the pushback. Good point, tollbooth_devil, about the W-2 boxes. I looked at my last one: the local box has “TELECOMMUTE” and no locality code. I called payroll again and got a different person. They told me their system can add a local tax only if the work state is changed to New York City, but that’s not the right distinction—my actual work state is New York, but the local code should reflect that I’m a New York City resident.

HamiltonHeights_H is right that no one will do this unless you make them. I asked them to send me the local withholding request form. The payroll rep said “we don’t have one.” I then asked if I can submit a written letter directing them to withhold city tax from future checks. She said she’d ask her supervisor. In the meantime I set aside a portion of each check so I won’t be surprised.

I’m not sure if I should just send an estimated payment now. I did look at my prior year’s total tax: my state withholding this year may be slightly below last year’s combined state and city number, so safe harbor may not save me. I’d rather pay quarterly than get hit with a bill and penalty.

At this point I’d rather argue with a Metro-North ticket machine. If you need to get out of your head for an afternoon, someone earlier had a thread about Tarrytown Lakes vs Croton Gorge for a quick no-car leg stretch? Tarrytown Lakes vs Croton Gorge for a quick no-car leg stretch?—decent options when payroll has you going in circles. But yeah, set aside the money and keep pushing. If they won’t add withholding, send the state the estimated payment. You don’t need the employer’s permission to pay your own tax.

Careful with the “work state” change. If they change your work state to New York City but you don’t physically work there, you might create a different set of nexus nonsense. The correct approach is usually to leave work state as New York and add a local residency withholding code. Many payroll systems call it “local tax code” rather than “work location.” The unwillingness may just be ignorance.

As to whether to pay estimated tax now: if you already know you won’t meet safe harbor, yes. But you can also adjust your state withholding upward by a fixed dollar amount each pay period, which counts as withholding and is treated as paid throughout the year regardless of when it’s withheld. That can avoid estimated payment deadlines and underpayment interest. That’s the move I’d make if payroll eventually agrees.

Updating because I got a real answer from payroll. The supervisor said their processor has a “New York City local resident tax” option that didn’t require changing my work state. It just requires checking a box on the employee record and entering my residence address. She said she’d enable it for the next pay period. So tollbooth_devil was right—it wasn’t a legal problem, just an HR workflow problem.

For the months where they didn’t withhold, I made an estimated payment through the New York State Department of Taxation and Finance portal. I marked it for New York City resident income tax. It’s not fun sending the city money early, but I’d rather see a smaller bill next year. I also asked for written confirmation of the local withholding change, because with payroll, if it’s not in writing it didn’t happen.

If anyone else is doing this: check your pay stub for a local section with a New York City code. If there’s nothing, don’t assume HR will catch it. You’re still the one on the return.

Good, that supervisor understood. In my experience the first check after the change will show something tiny like five dollars because the processor uses a default. Watch the second pay period and compare to the city rate. If it looks short, send them a message immediately. The city will not care that payroll made a mistake.

To be fair, even if payroll messes up the first check, underwithholding isn’t the end of the world if you’ve made that estimated payment. The bigger question is whether this changes your W-2 for the year. If they only withhold city tax for the last few months and don’t report city wages correctly, you might be filing with a local wage amount that doesn’t match your actual full-year city earnings. You can often file with your actual wages and report the withholding that shows on the W-2, but mismatches can trigger a notice. I’d make sure the W-2 eventually shows a local tax box with New York City wages, not just a blank line.

Unpopular opinion: sometimes you’re better off not fighting payroll for the current year and just treating the city tax as a known annual bill. If you don’t have enough withheld, you can make one estimated payment in January for the fourth quarter and still significantly reduce interest. Some people overestimate how aggressive the city is about underpayment penalties when the amount is under a few hundred dollars.

That is exactly the kind of mismatch I’m trying to avoid. I called again after tollbooth_devil mentioned W-2 reporting. The payroll supervisor said the processor will report New York City in the local box for the pay periods after the change, but the local wages may only reflect those post-change periods. That means my W-2 won’t show that I was a city resident for the full year, even though the state wages box will show full-year wages. I know from past years that my own return can allocate full-year resident wages, but the local withholding line may look off. The supervisor couldn’t say whether they’d issue a corrected W-2 with full-year local wages. I’ll keep my lease and utility bills in case the state asks.

For anyone reading: the city tax follows where you live, and if you moved mid-year, part-year resident rules apply. I became a city resident in March, so I’ll be part-year. That should reduce what I owe, and may be why I’m overthinking this. But I’d rather have the records now.

Part-year makes it easier. Your W-2 may look funny for a bit but you can file a part-year city allocation and use your pay stubs. Good on you for pushing payroll. Next time HR says “we don’t withhold city tax,” you can tell them the HR answer and the tax answer are two different things. And if this is the worst thing on your plate, you’re doing okay.