Purpose:
The purpose of this bulletin is to inform agencies of the updated IRS (Internal Revenue Service) tax withholding requirements for 2024 and other tax related topics.
Affected Employees:
Employees meeting the criteria as explained in this bulletin are affected.
Effective Dates:
Effective January 1, 2024, through December 31, 2024.
OSC Actions:
OSC has updated PayServ with the new Federal withholding rates for 2024. New York tax requirements for 2024 remain unchanged from 2023. OSC continues to use the Percentage Method on an Annual payroll period for income tax withholding purposes.
Agency Actions:
Agencies must notify employees who meet the criteria outlined in this bulletin.
Summary of Changes:
To date, the IRS has issued guidance on changes to the following areas for 2024:
- Withholding Rates, and Tax Brackets
- Additional Withholding Adjustment for Nonresident Aliens
- Supplemental Wage Withholding Flat Rate
- Social Security Wage Base Limit
- Contribution Limits on Pension/Retirement Plans
- Qualified Transportation and Parking Fringe Benefits Limit
- Mileage Rates
- Individual Taxpayer Identification Number (ITIN) Renewal/Expiration
- Adoption Credits
Tax Rates:
Federal Tax Withholding Rates
All Federal tax withholding rate changes were updated and effective the first paycheck of January 2024.
Federal Withholding Allowance
Per IRS Publication 15-T, withholding for employees with the 2019 version of Form W-4 or earlier will be calculated using $4,300 for each allowance. New employees, rehires, and employees changing their withholding must use the newest Form W-4, which does not use allowances. Please refer to Payroll Bulletin No. 1800.1 for more information.
New York Tax Withholding Rates
2024 New York State, New York City and Yonkers withholding tax tables remain unchanged from 2023.
New York State, New York City, and Yonkers Withholding Allowance
The value of one New York State, New York City, and Yonkers withholding allowance remains at $1,000.
Additional Withholding Adjustment for Nonresident Aliens
Withholding of federal income tax on the wages of nonresident alien (NRA) employee is subject to an additional withholding amount which is added to NRA employee’s wages for calculating federal income tax. The additional withholding amount added to annual income has increased to $10,300 for 2024 if the NRA employee was first paid wages before 2020 and has not submitted a new Form W-4 for 2020 or later. If the NRA employee was first paid wages in 2020 or later or has submitted a new Form W-4 for 2020 or later, then the additional withholding amount added to annual income is increased to $14,600. This procedure does not apply to NRA students from India.
Supplemental Wage Withholding
OSC uses the Aggregate method for Supplement Wage Withholding.
Note: This is provided for informational purposes only.
Social Security & Medicare Wage Base and Tax Rate Information
The Social Security wage base limit for 2024 has increased to $168,600 (max tax $10,453.20). There is no limit on the amount of wages subject to Medicare tax. The Social Security tax rate of 6.2% and Medicare tax rate of 1.45% remain the same. Employees receiving income in excess of $200,000 will be subject to an additional Medicare Tax of .9%. The additional tax applies only to income above the $200,000 threshold and is paid only by employees.
Contribution Limits on Pension/Retirement Plans:
403(b) and 457 Deferred Compensation
The annual contributions limit has increased to $23,000 for 2024. Please refer to Payroll Bulletin Nos. 2182 and 2185 for additional information.
Pre-Tax Benefits:
Qualified Parking Benefits
The maximum exclusion from gross income for qualified parking benefits has increased to $315 per month in 2024.
Qualified Transit Pass
The maximum exclusion from gross income for qualified transportation benefits has increased to $315 per month in 2024.
Mileage Rates:
The standard mileage rate used when calculating the value of personal use of an employer provided vehicle has increased to 67.0 cents per mile in 2024.
ITIN Renewal/Expiration:
Unused ITINs – ITINs not used on a federal income tax return in the previous three years (covering 2020, 2021, or 2022) will expire on December 31, 2023. ITINs with middle digits of (the fourth and fifth positions) “70”, “71”, “72”, “73”, “74”, “75”, “76”, “77”, “78”, “79”, “80”, “81”, “82”, “83”, “84”, “85, “86”, “87”, “88” have expired.
Expired ITINS – ITINs with the middle digits of “90”, “91”, “92”, “94”, “95”, “96”, “97”, “98”, or “99”, if assigned before 2013, have expired.
Adoption Credits:
The State payroll deduction limit, as determined by the Governor’s Office of Employee Relations (OER), has increased to $16,810 for the 2024 calendar year.
Questions:
Questions regarding this bulletin may be directed to the Tax and Compliance mailbox.