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Date: January 22, 2014

Bulletin Number: 1297

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Subject

Summary of IRS Tax Related Changes for Tax Year 2014

Purpose

To inform agencies of the updated IRS tax withholding requirements for 2014 and other related topics.

Affected Employees

Employees meeting the criteria as explained in this bulletin.


Effective
Date(s)

New tax withholding rates will be reflected in Institution paychecks dated January 9, 2014 and Administration paychecks dated January 15, 2014.

Background

For 2014, changes have been made to:

  • Federal Income Tax Withholding Rates
  • Withholding  Allowance Amount
  • Social Security Wage Base
  • Qualified Parking Benefits
  • Qualified Transit Pass
  • Mileage Rates

Tax Rates

The Federal income tax withholding rates have changed for 2014.  The new withholding tables can be found in IRS Publication 15 (Circular E), Employer’s Tax Guide for use in 2014.

To access this publication, visit the Internal Revenue Service website at http://www.irs.gov/pub/irs-pdf/p15.pdf

The withholding of federal income tax on the wages of nonresident alien employees is subject to an additional amount that is added to nonresident alien employees’ wages for calculating Federal income tax.  This amount is $2,250.00 for 2014. The effect of this added amount in the wages for calculating Federal income tax is a slightly higher withholding amount.

The New York State and Yonkers withholding tax tables have been revised for 2014.

Please refer to the following publications accessible at the NYS Department of Taxation and Finance website at www.tax.ny.gov for additional information.

NYS-50-T-NYS

New York State Withholding Tax Tables and Methods

NYS-50-T-Y

Yonkers Withholding Tax Tables and Methods



Personal
Exemptions/
Withholding
Allowances
(Federal & NYS)


The personal exemption/withholding allowance amount has increased to $3,950 for 2014.

There is no change in the withholding allowance for the New York State, New York City and City of Yonkers 2014 withholding rate.  The withholding allowance remains at $1,000.

Social
Security
& Medicare
Taxes

The Social Security wage base limit for 2014 has increased to $117,000 (formerly $113,700).  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 0.9%.

Qualified
Parking
Benefits

The maximum amount allowed as exclusion from gross income for qualified parking benefits will be $250 per month in 2014.

Qualified Transit Pass

The maximum amount allowed as exclusion from gross income for qualified transportation benefits is $130 per month in 2014.

Mileage Rates

The standard mileage rate applicable for 2014 under the cents-per-mile rule to compute the value of personal use of a vehicle provided to an employee is 56.0 cents per mile.

OSC Actions

OSC has updated PayServ with the new IRS requirements for 2014.

Agency Actions

Informational only.  Please inform your employees.


Questions

Questions regarding this bulletin may be e-mailed to the Tax and Compliance mailbox.