This Bulletin Supersedes Payroll Bulletin 2236

Purpose: 

The purpose of this bulletin is to notify agencies of changes in maintenance rates for employee housing and meals.

Affected Employees: 

Employees with deductions for employee housing and/or meals using Deduction Code 401 (Taxable Maintenance) or 402 (Non-Taxable Maintenance) are affected.

Background: 

In accordance with Division of the Budget Policy and Reporting Manual Items B-300 and B-300A, issued April 26, 2024, maintenance rates have been increased.

Note: Items B-0300 and B-0300A include information for specific unions/bargaining units.

The Determining Taxability of Maintenance Deductions attachment can be used as a guideline for establishing the taxable status of maintenance deductions for State employees.

Effective Dates: 

The changes outlined in Items B-0300 and B-0300A are effective as of April 26, 2024.

OSC Actions: 

OSC has created Control-D report NBEN725 (Employees with Maintenance Deductions) to identify employees who have maintenance deductions in each agency. 

Agency Actions: 

Agencies are required to become familiar with IRS regulations on employer provided lodging, specifically the conditions for excluding the value of employer provided lodging from employee’s taxable income, and to make appropriate procedural changes to ensure compliance. If an agency provides housing at no charge to an employee and the IRS nontaxable criteria for housing is not met, the value of the housing is considered taxable income and is subject to all tax withholdings and must be reported on the employee’s Form W-2. State agencies, apart from SUNY, should notify OSC’s Tax and Compliance Team if they are providing housing to employees without charge. SUNY agencies should refer to Payroll Bulletin SU-188 for further guidance on how to report this income.

Please see IRS Publication 15-B (Employer’s Tax Guide to Fringe Benefits) for additional information and guidance.

Agencies must report changes to maintenance deductions by inserting a new effective dated row on the General Deductions page. The effective date should be the first day of the pay period for the check date in which the deduction will be effective. 

NOTE: This deduction should be immediately end dated when an employee is no longer receiving employer provided maintenance. 

Questions: 

The Division of Budget Policy and Reporting Manual, Item B-300 and Item B-300A issued April 26, 2024, are available from the Division of the Budget at:  https://www.budget.ny.gov/guide/bprm/b/b-0000.html.

Tax-related questions regarding this bulletin may be directed to the Tax and Compliance mailbox. 

Deduction related questions regarding this bulletin may be directed to the Payroll Deduction mailbox.