Tax Frequently Asked Questions - OPA

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Helpful Payroll & Tax Information

Helpful Payroll & Tax Information


Tax Frequently Asked Questions

What is the Health Care Worker Bonus?
What is changing on the 2020 Form W-4?
What is a W-2 Wage and Tax Statement?
When do I get a W-2?
How do I get another copy of my W-2?
What do I do if my W-2 is incorrect?
How are the wages and taxes on my W-2 determined?
Why don't the total wages on my W-2 match my salary?
I worked for two agencies during the tax year. How many W-2 statements will I receive?
How are my pre-tax benefit program deductions shown in my W-2?
Do I pay taxes for fringe benefits?
What is the Domestic Partner benefit?
Is the payment I received for the Health Benefits Buy-Out Waiver Program reflected in my W-2?
Does my W-2 reflect adjustments for TreasuryDirect purchases through payroll deductions?
What adjustments are made on my W-2 due to injuries on the job?
How do refunded payments affect my W-2?
What is the Section 1127 Waiver?
How did the change in the non-resident tax affect my W-2?
How long should I keep a copy of my W-2?
How are union disability benefits recorded on my W-2?
Whom can I contact if I have a question about federal or state taxes?
When I filed my taxes last year, I owed money. How can I avoid owing taxes in the future?
Why is the "Retirement Plan" box checked off on my W-2 even though I am not a member of a pension system?
I am a new employee and have been told that if I join the Deferred Compensation Plan, I will not pay Social Security taxes. Is this true?
Have more questions about taxes?

What is the Health Care Worker Bonus?
Eligible City employees may receive a one-time, non-pensionable payment for health care worker bonus. The payment is subject to federal, Social Security, and Medicare withholding taxes. The payment is not subject to New York State, City, or Yonkers withholding taxes.

What is changing on the 2020 Form W-4?
The Form W-4 has changed as of January 1, 2020. According to the IRS, the new form increases the transparency and accuracy of the withholding system.

The most important change to the new Form W-4 is that it no longer uses withholding allowances. You are instead asked to enter dollar amounts corresponding to tax parameters such as marital status, dependents, multiple jobs, credits, and deductions.

New employees who begin working within the City of New York on January 1, 2020, or later must fill out the new Form W-4. Current City of New York employees who need to make a change to their Form W-4 on file must also fill out the new Form W-4.

For administrative help regarding the new Form W-4, please contact the human resources/payroll office at your agency. For more detailed assistance on what financial information to use in the new Form W-4, please contact a tax professional.

View FAQ about 2020 Form W-4

Learn more on the IRS website

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What is a W-2 Wage and Tax Statement?
Your W-2 is a record of your earnings and tax withheld for the year. You use information found on your W-2 to file your federal, state, and local tax returns.

The City of New York sends a copy of your W-2 statement to the Social Security Administration (SSA) to update your lifetime record of earnings. This is the basis for entitlement to retirement and disability benefits, survivor benefits for family members in case of your death, and eligibility for Medicare insurance coverage.

Learn more about your W-2 Wage and Tax Statement

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When do I get a W-2?
You will receive copies of your W-2 Wage and Tax Statement every year by January 31.

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How do I get another copy of my W-2?
Most NYC employees can get a copy of their W-2 by logging into NYCAPS ESS from Cityshare. You can also request a duplicate W-2 from your agency payroll office or from OPA. For tax years 1998 and after, most agencies can print replacement W-2s for their employees. OPA will continue to provide duplicate W-2s for prior years.

Download the W-2 Duplicate Request form or call OPA at (212) 669-8555 to have it faxed to you. You may mail or fax your request to OPA as noted on the form.

You can expect to receive the duplicate W-2 in five to ten business days. It will be sent in the mail to the address you indicate on the request, and cannot be faxed.

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What do I do if my W-2 is incorrect?
If the name, Social Security number, or amount of wages or taxes is incorrect on your W-2, contact your agency payroll office. They will research the problem and forward a W-2 Correction Request form along with documentation to OPA.

Expect OPA to process the corrected W-2 within ten to fifteen business days.

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How are the wages and taxes on my W-2 determined?
Beginning with the first payroll and continuing through the year, your earnings and tax deductions are posted to your year-to-date totals. Your W-2 reflects the accumulated year-to-date totals that show on your last pay statement of the year.

Learn more about your W-2 Wage and Tax Statement

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Why don't the total wages on my W-2 match my salary?
The date of the wage payment determines the year into which your wages fall for tax purposes. Most City employees are paid 26 times a year, where each two-week pay period includes 14 days during which wages were earned.

If you worked the entire year, you actually worked more than that, usually by one more day. That additional day's pay will be reflected on the first payment for the following year and will be reflected in the following year's W-2. Every year there will be an overlap at the beginning and/or end of the year.

To make up for these days, in certain years there are 27 pay periods. This last occurred in 2015.

See the Pay Schedules

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I worked for two agencies during the tax year. How many W-2 statements will I receive?
In most cases, you will receive one W-2 statement that will combine all earnings. Department of Education Custodians and Custodian Helpers will receive separate W-2 statements.

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How are my pre-tax benefit program deductions shown in my W-2?

For Tax Deferred Annuity Accounts/Deferred Compensation Plans (TDA/DCP):
Contributions are shown in Box 12 of your W-2. TDA contributions are not subject to income taxes, but they are subject to FICA taxes. As a result, your wages shown for Social Security and Medicare taxes may be greater than wages shown for income taxes.
You file your federal, state, and city tax returns on the lower reported wage amount shown in your W-2 in Boxes 1, 16, and 18. Although your contributions are made through payroll deductions, your year-to-date earnings on your pay statement are not affected.

For Pension Plans:
Contributions are shown in Box 14, IRC414H. Pension contributions are not subject to federal income tax, but are subject to state, city, Social Security, and Medicare taxes. You need to add the pension contribution shown in Box 14 to the reported wage amount.
Only standard pension deductions and certain "buy back" deductions are included in the IRC414H Box. Pension loan deductions are taxable and not included in the IRC414H Box.

For Commuter Benefits:
The amounts for the Commuter Benefits program are covered under Section 132 of the IRS code, and reflected in Box 14, IRC132. The amounts for Commuter Benefits are not subject to taxable wages, Social Security, Medicare, state, and city taxes.

For Health Insurance Premiums, Dependent Care Assistance Program (DeCAP), and Health Care Flexible Spending Account (HCFSA):
The amounts for these programs, covered under Section 125 of the IRS code, are reflected in Box 14, IRC125. The amount for DeCAP is shown also in Box 10. They are not subject to federal, Social Security, and Medicare taxes. The reduction in earnings shows on your W-2 but not on your pay statement.
The amount in the IRC 125 Box is subject to New York State and City taxes. The NYS income tax instructions direct the income tax filer to report wages as they appear on the W-2 in Box 1 then to add back the amount to arrive at New York State/City taxable wages.

Learn more about Social Security

Learn more about your W-2 Wage and Tax Statement

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Do I pay taxes for fringe benefits?
The following fringe benefits are taxable:

Union Legal Service
A portion of the money the City contributes to the Union Welfare Fund is used to provide pre-paid group legal service benefits to eligible individuals. The cost of this benefit is considered income, whether the service is used or not. The value of the benefit varies by union affiliation.

Motor Vehicle Use
If a City vehicle is assigned to you and you use it for driving to and from home, you are required to pay taxes on the value of the use of the vehicle. The amount is determined by mileage or a flat rate and is reported by your agency to OPA.

Parking
If you have access to free parking space for your own vehicle in areas in which equivalent parking costs are more than $300 per month, you are required to pay tax on the value of the parking above $300 per month. Your agency reports parking fringe benefit amounts to OPA.

Learn more about transportation benefits

Health and Fitness Reimbursement
Reimbursements by the Management Benefits Fund are subject to income, Social Security, and Medicare taxes.

Wellness Benefits Reimbursement
The NYC Employee Benefits Program and City unions announced a partnership between Weight Watchers Reimagined and the City of New York. With the City’s program, employees have access to a subsidy reducing the cost of membership. The dollar value of this contribution/benefit is included as taxable income to the employee.

The amount of your taxable fringe benefits is shown in Box 14 and has increased your taxable wages in Box 1, Social Security and Medicare wages in Boxes 3 and 5, state wages in Box 16, and local wages in Box 18A or Box 18B. Taxable fringe benefits are reported and processed at the end of the year and may not be reflected in year-to-date earnings in your final pay statement.

Learn more about your W-2 Wage and Tax Statement

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What is the Domestic Partner benefit?
The W-2 form now includes the taxable value of providing City health plan and/or union welfare fund coverage for your domestic partner.

IMP- Imputed Income (The taxable value of the employer contribution for health benefits provided to a retiree's domestic partner.) This amount is included in Box 1 and must be reported for Federal, State and Local taxes. This amount is shown in Box 14 labeled as "IMP".

The City paid your Social Security (Box 4) and Medicare (Box 6) taxes. Therefore, your taxable wage amounts (Boxes 1, 3 and 5) have been increased accordingly.

Learn more about the Employee Health Benefits Program

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Is the payment I received for the Health Benefits Buy-Out Waiver Program reflected in my W-2?
If you waived your health benefits coverage under the Buy-Out Waiver Program, the incentive payments you received are reflected in Box 1, taxable wages, Boxes 3 and 5, Social Security and Medicare wages, and Boxes 16 and 18, state and local wages.

Payments for the Health Buy-Out Waiver Program are included on your pay statement.

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Does my W-2 reflect adjustments for TreasuryDirect purchases through payroll deductions?
Your W-2 does not reflect adjustments for TreasuryDirect purchases. The interest from savings bonds is exempt from state and local income tax and may be deferred from federal tax until the bonds are redeemed.

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What adjustments are made on my W-2 due to injuries on the job?
If you received benefits due to Workers' Compensation or Line-of-Duty Injury (LoDI), you may receive a W-2c Statement of Corrected Wage and Tax Amounts. Based on the date of approval or payment to your agency, the adjustments may not occur until a subsequent year.

Workers' Compensation (Option 1 Benefits):
If you remained on payroll in active status under Option 1 for a work-related injury, your agency receives the benefit payment from the Workers' Compensation Division of the Law Department. OPA is notified of the amount of the benefit and you receive a refund for Social Security and Medicare taxes in a subsequent payroll. If the adjustment occurs in a subsequent year, you receive a refund check.
Workers' Compensation Benefits are not subject to withholding, Social Security, or Medicare taxes. Your year-to-date earnings record is reduced by the amount of the benefits. This affects the taxable wages in Box 1, Social Security and Medicare wages in Boxes 3 and 5, and state and local wages in Boxes 16 and 18.

Line of Duty Injury (LoDI)-Department of Education (DoE) Pedagogical Employees Only:
During the period you are on approved paid leave because of an injury received in the line of duty, your federal, state, and local wages are not subject to tax. LoDI will reduce Social Security and Medicare wages after six continuous, full months of approved LoDI leave following the month during which the approved LoDI leave began.
Contributions to your 401(k), 403(b), and 457 tax deferred annuity could be affected by LoDI benefits. If there is a discrepancy in your W-2 statement due to LoDI, call the DoE LoDI hotline at (718) 935-4373.

Line of Duty Injury (LoDI)-Police (NYPD), Fire (FDNY), Correction (DoC), Sanitation (DSNY), and District Attorneys (DAs) Offices Only:
LoDI is the acronym for Line of Duty Injury. Line of Duty Injury payments are authorized payments made, pursuant to statute, to eligible uniformed members of the City's Correction, Fire, Police and Sanitation departments who were out of work as a result of an injury which occurred in the line of duty.
Contributions to your tax-deferred annuity could be affected by LoDI benefits. If there is a discrepancy in your W-2 statement due to LoDI, contact your agency and request that a W-2 Correction Request form be submitted to OPA.

Line of Duty Injury (LoDI)- District Attorneys (DAs) Offices Only:
During the period you are on approved paid leave because of an injury received in the line of duty, your federal, state, and local wages are not subject to tax. LoDI will reduce Social Security and Medicare wages after six continuous, full months of approved LoDI leave following the month during which the approved LoDI leave began.
Contributions to your tax-deferred annuity could be affected by LoDI benefits. If there is a discrepancy in your W-2 statement due to LoDI, contact your agency and request that a W-2 Correction Request form be submitted to OPA.

Workers' Compensation for Correction Officers Only:
Correction Officers may be eligible for Workers' Compensation in addition to LoDI. If you remained on payroll in active status under Workers' Compensation Option 1, your benefits are not subject to withholding, Social Security, or Medicare taxes. Your Social Security and Medicare wage record is reduced by the amount of the benefits.

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How do refunded payments affect my W-2?
Occasionally, a check might be produced for you to which you are not entitled. This can happen when you go on leave, stop working, or are paid erroneously.

After pay day, these checks are refunded to OPA and the earnings and deductions that were produced when the check was issued are reversed. It is as if the check never existed. Your pay statement will reflect the earnings and deductions from the check until it is refunded.

At the end of each year, OPA works with agencies to ensure that as many checks as possible are refunded before the final pay calculation so that pay statements reflect accurate year-to-date totals.

If a refund or adjustment is processed after the final calculation but before your W-2 is produced, the refund will not be reflected in your pay statement, but your W-2 will be correct.

If a check was refunded after your W-2 was produced, your W-2 will be incorrect and a W-2c will be issued.

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What is the Section 1127 Waiver?
Under Section 1127 of the City Charter, if you are a City employee who lives outside the City and you were hired after January 4, 1973, as a condition of employment you agreed to pay to the City an amount equal to a City personal income tax on residents, computed and determined as if you were a resident of the City.

The amount deducted from your pay for the Section 1127 Waiver shows up under City Waiver on your pay statement. Employees who had a Section 1127 Waiver withheld from their pay will receive an 1127 Statement as well as a W-2. If you need a duplicate 1127 Statement, you can request it on the W-2 Duplicate Request form. In Section Four of the W-2 Form, check 1127 waiver.

Section 1127 of the New York City Charter does not apply to you if you work for the Department of Education, City University of New York, District Attorneys' Offices, or New York City Housing Authority. Also, it does not apply if you are a NYC Housing Authority or Transit Police transferred into the New York Police Department.

Download the W-2 Duplicate Request form

See the City Charter

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How did the change in the non-resident tax affect my W-2?
If you are not a resident of New York City, you no longer are subject to City income tax. The amount reflected in Box 20 includes wages paid while you resided within New York City.

Taxable wages in Box 1 and state wages in Box 16 reflect your wages for the full year. As a result of the legislative change, local wages in Box 20 may be significantly lower than the wages in Box 1 or 16.

Learn more about your W-2 Wage and Tax Statement

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How long should I keep a copy of my W-2?
You should keep a copy of your W-2 for at least three years after the due date for filing your income tax return. The SSA suggests you keep copies until you begin receiving your Social Security benefits, just in case there is a question about your work record or earnings in a particular year.

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How are union disability benefits recorded on my W-2?
If you received short-term disability benefits from your union, you will receive one W-2 which includes all other wages. These payments are considered taxable income and are subject to income, Social Security, and Medicare taxes.

If you have a question about these payments, contact your union. If there is an error, your union will contact OPA to issue a corrected W-2.

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Whom can I contact if I have a question about federal or state taxes?
If you have a question about federal taxes, visit the IRS website or call 800-829-1040. If you have a question about NY State taxes, check out the NYS Department of Taxation & Finance website or call them at 800-CALL-TAX (800-225-5829).

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When I filed my taxes last year, I owed money. How can I avoid owing taxes in the future?
Your withholding taxes are based on your earnings and the allowances you declare on your federal and state withholding certificates. In order to have more taxes withheld during the year so you owe less when you file your tax returns, you can reduce your allowances.

You can also have additional taxes taken out. The worksheets with the W-4 federal and IT-2104 NYS certificates help you determine the appropriate number of allowances for your circumstances.

Learn more about Withholdings

Download a W-4 form from the IRS site

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Why is the "Retirement Plan" box checked off on my W-2 even though I am not a member of a pension system?
The IRS defines a New York City employee as belonging to a pension plan if the employee is eligible to join a plan regardless of whether the employee joins the plan. If you are eligible to join a pension plan, Box 13 on your W-2 is checked.

Learn more about pension plans

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I am a new employee and have been told that if I join the Deferred Compensation Plan, I will not pay Social Security taxes. Is this true?
Yes, this is true in certain situations. If you are not a member of a pension and you elect to contribute at least 7.5 % or more to a single defined contribution plan, such as the Deferred Compensation 401(k) or 457 plans, a 403(b) Tax Deferred Annuity (TDA), and 403(b) Roth, you will not pay Social Security tax.

Learn more about Taxes and Social Security

Learn more about Pension Plans

Find out more about Deferred Compensation

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Have more questions about taxes?
Questions about federal taxes? Visit the IRS website.

Need answers about New York State taxes? Visit the NYS Taxpayer Answer Center.

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