Understanding the IT-2104 Form | Complete Payroll

The subject of taxes may not be the most engaging, but it’s certainly one that employees need to pay attention to ensure all paperwork is complete and completed correctly. 

Income taxes are withheld in 41 states in addition to federal income taxes. In New York State, the form that will need to be filled out to designate how much needs to be withheld is the IT-2104 Form. 

This form may seem complicated at first glance, but that’s where we can help. In this article, we will break down what employees will need to fill out the form to make sure they are compliant with all state withholding requirements. 

W-4 vs. IT-2104

It's easy to feel overwhelmed with all the paperwork when it comes to taxes, and your employees may find themselves confused. It's important to clarify that while both the W-4 and IT-2104 forms need to be completed, they serve different purposes. The W-4 is specifically for federal income tax, while the IT-2104 is the form for state income tax in New York.

Start With the Worksheet

One of the aspects of filling out tax forms that is the most anxiety-provoking is the fear that you made an error somewhere. Before you begin filling out your form, start with your worksheet first. This worksheet is designed to help guide you through all considerations you need to make when designating your withholding amount. When filled out carefully, this worksheet will help ensure you aren’t withholding too much or too little. 

Types of IT-2104 Forms

The IT-2104 form comes in various types, and the specific one you need to fill out will depend on several factors relevant to your individual circumstances. Although the majority of taxpayers will complete the IT-2104 "Employee's Withholding Allowance Certificate," there are other variations that may need to be filled out, such as:

• IT-2104-E Certificate of Exemption from Withholding
• IT-2104-IND New York State Withholding Exemption from Withholding for Native Americans
• IT-2104-MS New York State Withholding Exemption Certificate for Military Service Personnel
• IT-2104-P Annuitant's Request for Income Tax Withholding (An annuitant is an individual who is entitled to collect the regular payments of a pension or an annuity investment.)
• IT-2104-SNY Certificate of Exemption from Withholding for START-UP NY Program
• IT-2104.1 New York State, City of New York, and City of Yonkers Certificate of Nonresidence and Allocation of Withholding Tax

IT 2104 and Payroll

It’s the payroll department's responsibility to get new employees to fill out this form and return it. Once returned, payroll will then send it to the New York State Tax Department.

In the event that an employee fails to complete the IT-2104 form, payroll should opt to withhold taxes from singles with zero allowances. This approach guarantees that the employer remains in compliance by withholding the maximum amount of New York State Taxes, preventing any potential issues.