The New York Department of Taxation recently announced Registration for the Employer Compensation Expense Tax Program (ECEP) is now open. The Employer Compensation Expense Program (ECEP) established a new optional Employer Compensation Expense Tax (ECET) that employers can elect to pay if they have employees that earn over $40,000 annually in wages and compensation in New York State. Employers who wish to enroll for calendar year 2019, you must do so by December 1, 2018. Employers interested in the program should visit the Employer Compensation Expense Program (ECEP) Employer Election portal to enroll online through their Business Online Services account.
The Enrollment portal can be found here: https://www.tax.ny.gov/bus/ads/webecreg.htm
EMPLOYER ACTION REQUIRED
Employers should notify their employees they have opted into ECET and encourage covered employees to review their current Form IT-2104 and adjust their withholding accordingly. At the end of the year, employers should communicate to their covered employees the amount of wages subject to ECET. The New York Department of Taxation will provide a Template which can be used to communicate covered amounts. There are no current plans to require reporting of covered amounts on Form W2.
Employers MUST notify their Payroll Service provider when opting into the program. Currently the New York Department of Taxation is only providing electronic filing through the employer’s Business Services On-line Account. Employers who DO NOT currently have a Business Services On-line account will need to register for an account in order to enroll in the program and to complete required quarterly filings which will be due at the same time as withholding returns.
To register for a Business Services On-line Account please visit: https://www.tax.ny.gov/online/bus.htm
For more information on the New York Employer Compensation Expense Program please visit: https://www.paylocity.com/2018/07/12/new-york-releases-new-details-on-the-employer-compensation-expense-program/
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.