New York City levies an income tax. This is a tax on all income, not just on wages earned in the city. As far as we are aware, New York is the only city that does this.
Because this is an income tax, there is a different mechanism for entering it than the standard local tax.
You do NOT enter a local tax rate on the Wages > “more info” screen.
Instead, you check a box to specify that the New York City tax applies. This checkbox appears several places in the software, including:
- Parties & Children > Party
- On the State Taxes report. (Go to View/Edit Taxes, scroll to the bottom, and click the link for state taxes).
Once you check this box, the software will automatically calculate the New York City income tax.