Background:
The Deductions and Tax Administration section audits and processes the deduction, withholding and payment of taxes, worker compensation benefits, child support and other garnishments, union dues, charitable and pension contributions, and all other payroll deductions. The section processes deductions for 8 different retirement systems, 47 unions, 110 negotiating units and dozens of financial institutions including credit unions and insurance companies.
The section is responsible for the timely and accurate payment and reporting of employee and employer tax withholdings to over 35 taxing authorities, including the issuance of over 350,000 information statements (W-2s, 1042-S, 1099- Misc., and W-2c) annually.
Retirement and Savings Plans:
The Retirement and Savings Plans Team audits retirement and savings deductions and coordinates the correction of related transaction errors, working closely with retirement system liaisons, and 403(b) and Deferred Compensation vendors. This includes providing training, customer service, issue resolution, and feedback for our agency partners. The team makes retirement contribution payments for the Optional Retirement Plan (ORP), the Voluntary Defined Contribution plan (VDC) and the New York State Teacher Retirement System (NYSTRS). They also determine system updates needed to implement changes for retirement systems, and 403(b) and Deferred Compensation savings plans, to remain in compliance with laws and regulations.
General Deduction:
The General Deduction, Direct Deposit, and Reissuance Team audits general deduction transactions, processes direct deposit delete and reversal and paper check stop payment and reissuance requests, and monitors vendor files. They also coordinate the annual outreach and escheatment of uncashed NYS payroll checks and maintain the Payroll Check Notification Report. Additionally, they monitor and respond to several mailboxes; the Direct Deposit Mailbox for direct deposit inquires, the Uncashed NYS Payroll Check mailbox for stop payment, uncashed check outreach and reissuance inquiries, and the Payroll Deduction mailbox for General Deduction and vendor/vendor file inquiries.
Garnishments:
The Garnishment Team processes involuntary deductions (garnishments), garnishment refunds, garnishment vendor payments, maintains garnishment vendor information, and responds to all state agency garnishment emails and inquiries. The types of garnishments include paper orders received for Bankruptcies, Tax Levies, Student Loans, Writs of Garnishment, Wage Assignments and Spousal Support, as well as Electronic Income Withholding Orders (e-IWO) received for Child Support. The team is also responsible for the timely processing of garnishment releases.
Reversal and Exchange:
The Reversal and Exchange (AC 230) Team audits and processes the AC-230 Report of Check Returned for Refund or Exchange worksheet for inactive employees who were overpaid, and the money was recovered via returned payroll check, direct deposit reversal, or certified check. The team also processes check exchanges needed due to employee name change or death.
Workers’ Compensation:
The Workers’ Compensation Team monitors Workers’ Compensation (WC) benefits and ensures that WC leaves are documented and coded properly. To do this, the team works closely with the New York State Insurance Fund (NYSIF), Department of Civil Service, Bargaining Unit representatives, and state agency partners. The team also ensures taxes are accurately refunded for employees on paid WC leave, including issuing corrected W-2s as needed. Additionally, they audit supplemental payments made to employees on WC and monitor the Workers' Compensation mailbox.
Tax Audit and Production:
The Tax Audit and Production Team identifies and resolves general tax errors to ensure accurate tax withholding from employee paychecks. They prepare, review, and issue annual tax documents for New York State employees, including the W-2, 1099-misc, 1042-S, corrected W-2 and Credit Letters. They also review, research, and process requests and inquiries submitted to the Tax and Compliance mailbox.
Tax Payments:
The Tax Payment Team prepares all employee and employer tax payments made to the Internal Revenue Service (IRS), New York State Department of Taxation and Finance, and more than 35 other state taxing authorities. They ensure these payments are made in accordance with all applicable rules and regulations, including the on-time reporting of tax withholding information.
Tax Research and Analysis:
The Tax Research and Analysis Team monitors and analyzes the impact of changes in Federal, New York State, local and other state tax laws, and determines if changes in business process are needed as a result of these changes. The team also monitors IRS tax documents to ensure accurate reporting.
Last Updated 06/16/2026