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Tax Related FAQs

What adjustments are made on my W-2 due to injuries on the job?
How do refunded payments affect my W-2?
What is the Section 1127 Waiver?
How did the change in the non-resident tax affect my W-2?
How long should I keep a copy of my W-2?
How are union disability benefits recorded on my W-2?
Whom can I contact if I have a question about federal or state taxes?
When I filed my taxes last year, I owed money. How can I avoid owing taxes in the future?
Why is the "Retirement Plan" box checked off on my W-2 even though I am not a member of a pension system?
I am a new employee and have been told that if I join the Deferred Compensation Plan, I will not pay Social Security taxes. Is this true?

 

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What adjustments are made on my W-2 due to injuries on the job?
If you received benefits due to Workers' Compensation or Line-of-Duty Injury (LoDI), you may receive a W-2c Statement of Corrected Wage and Tax Amounts. Based on the date of approval or payment to your agency, the adjustments may not occur until a subsequent year.

Workers' Compensation (Option 1 Benefits)
If you remained on payroll in active status under Option 1 for a work-related injury, your agency receives the benefit payment from the Workers' Compensation Division of the Law Department. OPA is notified of the amount of the benefit and you receive a refund for Social Security and Medicare taxes in a subsequent payroll. If the adjustment occurs in a subsequent year, you receive a refund check.

Workers' Compensation Benefits are not subject to withholding, Social Security, or Medicare taxes. Your year-to-date earnings record is reduced by the amount of the benefits. This affects the taxable wages in Box 1, Social Security and Medicare wages in Boxes 3 and 5, and state and local wages in Boxes 16 and 18.

Line of Duty Injury (LoDI)-Department of Education (DoE) Pedagogical Employees Only
During the period you are on approved paid leave because of an injury received in the line of duty, your federal, state, and local wages are not subject to tax. LoDI will reduce Social Security and Medicare wages after six continuous, full months of approved LoDI leave following the month during which the approved LoDI leave began.

Contributions to your 401(k), 403(b), and 457 tax deferred annuity could be affected by LoDI benefits. If there is a discrepancy in your W-2 statement due to LoDI, call the DoEd LoDI hotline at (718) 935-4373.

Line of Duty Injury (LoDI)-Police (NYPD), Fire (FDNY), Correction (DoC), Sanitation (DSNY), and District Attorneys (DAs) Offices Only
LoDI is the acronym for Line of Duty Injury. Line of Duty Injury payments are authorized payments made, pursuant to statute, to eligible uniformed members of the City's Correction, Fire, Police and Sanitation departments who were out of work as a result of an injury which occurred in the line of duty.

Contributions to your tax-deferred annuity could be affected by LoDI benefits. If there is a discrepancy in your W-2 statement due to LoDI, contact your agency and request that a W-2 Correction Request form be submitted to OPA.

Line of Duty Injury (LoDI)- District Attorneys (DAs) Offices Only
During the period you are on approved paid leave because of an injury received in the line of duty, your federal, state, and local wages are not subject to tax. LoDI will reduce Social Security and Medicare wages after six continuous, full months of approved LoDI leave following the month during which the approved LoDI leave began.

Contributions to your tax-deferred annuity could be affected by LoDI benefits. If there is a discrepancy in your W-2 statement due to LoDI, contact your agency and request that a W-2 Correction Request form be submitted to OPA.

Workers' Compensation for Correction Officers Only
Correction Officers may be eligible for Workers' Compensation in addition to LoDI. If you remained on payroll in active status under Workers' Compensation Option 1, your benefits are not subject to withholding, Social Security, or Medicare taxes. Your Social Security and Medicare wage record is reduced by the amount of the benefits.

Download a W-2 Correction Request form (PDF)

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How do refunded payments affect my W-2?
Occasionally, a check might be produced for you to which you are not entitled. This can happen when you go on leave, stop working, or are paid erroneously.

After pay day, these checks are refunded to OPA and the earnings and deductions that were produced when the check was issued are reversed. It is as if the check never existed. Your pay statement will reflect the earnings and deductions from the check until it is refunded.

At the end of each year, OPA works with agencies to ensure that as many checks as possible are refunded before the final pay calculation so that pay statements reflect accurate year-to-date totals.

If a refund or adjustment is processed after the final calculation but before your W-2 is produced, the refund will not be reflected in your pay statement, but your W-2 will be correct.

If a check was refunded after your W-2 was produced, your W-2 will be incorrect and a W-2c will be issued.

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What is the Section 1127 Waiver?
Under Section 1127 of the City Charter, if you are a City employee who lives outside the City and you were hired after January 4, 1973, as a condition of employment you agreed to pay to the City an amount equal to a City personal income tax on residents, computed and determined as if you were a resident of the City.

The amount deducted from your pay for the Section 1127 Waiver shows up under City Waiver on your pay statement.Employees who had a Section 1127 Waiver withheld from their pay will receive an 1127 Statement as well as a W-2. If you need a duplicate 1127 Statement, you can request it on the W-2 Duplicate Request form. In Section Four of the W-2 Form, check 1127 waiver.

Section 1127 of the New York City Charter does not apply to you if you work for the Department of Education, City University of New York, District Attorneys Offices, or New York City Housing Authority. Also, it does not apply if you are a NYC Housing Authority or Transit Police transferred into the New York Police Department.

Download a W-2 Duplicate Request form (PDF)
Download the City Charter (PDF)

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How did the change in the non-resident tax affect my W-2?
If you are not a resident of New York City, you no longer are subject to City income tax. The amount reflected in Box 20 includes wages paid while you resided within New York City.

Taxable wages in Box 1 and state wages in Box 16 reflect your wages for the full year. As a result of the legislative change, local wages in Box 20 may be significantly lower than the wages in Box 1 or 16.

Learn more about your W-2 Wage and Tax Statement

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How long should I keep a copy of my W-2?
You should keep a copy of your W-2 for at least three years after the due date for filing your income tax return. The SSA suggests you keep copies until you begin receiving your Social Security benefits, just in case there is a question about your work record or earnings in a particular year.

Visit the Social Security Administration Web site

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How are union disability benefits recorded on my W-2?
If you received short-term disability benefits from your union, you will receive a separate W-2 reflecting these payments. It will be labeled "Third Party Payor" in the miscellaneous box. These payments are considered taxable income and are subject to income, Social Security, and Medicare taxes.
If you have a question about these payments, contact your union. If there is an error, your union will contact OPA to issue a corrected W-2.

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Whom can I contact if I have a question about federal or state taxes?
Call the IRS at (800) 829-1040 or call the New York State Department of Taxation and Finance at (800) CALL-TAX (800-225-5829).

Visit the IRS Web site
Visit the New York state Web site

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When I filed my taxes last year, I owed money. How can I avoid owing taxes in the future?
Your withholding taxes are based on your earnings and the allowances you declare on your federal and state withholding certificates. In order to have more taxes withheld during the year so you owe less when you file your tax returns, you can reduce your allowances.

You can also have additional taxes taken out. The worksheets with the W-4 federal and IT-2104 NYS certificates help you determine the appropriate number of allowances for your circumstances.

Download the IT-2104 form from the NYS Dept. of Taxation and Finance
Learn more about withholding
Download a W-4 form from the IRS Web site

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Why is the "Retirement Plan" box checked off on my W-2 even though I am not a member of a pension system?
The IRS defines a New York City employee as belonging to a pension plan if the employee is eligible to join a plan regardless of whether the employee joins the plan. If you are eligible to join a pension plan, Box 13 on your W-2 is checked.

Learn more about pension plans

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I am a new employee and have been told that if I join the Deferred Compensation Plan, I will not pay Social Security taxes. Is this true?
Yes, this is true in certain situations. If you are not a member of a pension and you elect to contribute at least 7.5 % to a 401(k) Deferred Compensation Plan (DCP) or 403(b) Tax Deferred Annuity (TDA or 457 DCP), you will not pay Social Security tax.

If you are a member of a pension system or contribute less than 7.5 % to a 401(k), Roth 401(k), 403(b) or 457, you would pay Social Security tax.

Learn more about Social Security
Learn more about pension plans
Learn more about the Deferred Compensation Plan

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