As New York Gov. Andrew Cuomo continues to understand what Tax Cuts and Jobs Act means for his state, he has proposed a payroll tax.
To offset the act’s limit on the deductibility of state and local taxes–which New York is estimated to lose about $14 billion–the state’s legislature is considering the creation of a state payroll tax to replace the state income tax for employers.
The employer would have to cover their employees’ state tax liability through the payroll tax and employees would have to agree to a reduction in their hourly wage or salary and hope they’ll end up with more savings when they file for their 2018 taxes, according to the Journal News.
“No employer is going to volunteer to pay the taxes without asking employees to take a reduction in their salaries,” said Ron Hegt, a CPA who moderated a Westchester County Association panel discussion last week, to the Journal News. “I’m not going to do it for the people who work here. It’s going to be a very hard sell.”
Hegt’s analysis shows that both individuals and businesses in the northern suburbs of New York City will benefit from the tax bill–even with the $10,000 cap on deductions for state and local taxes, according to the Journal News.
The proposed tax plan will be continued to be discussed until the budget negotiations end on April 1, 2018.
