All These Confusing Deductions
Q. I just wanted to ask why these taxes come out of my check. I live in New york.
Takes they take out:
Federal W/h, OASDI, Medicare, State W/H ny, State SDi Ny, Ny 2010-nycny
What is the Medicare for? Also the State Sdi Ny And the Ny 2010-Nycny what are these tax deductions are for? These are taken out on a weekly bases on my paystub. Thank you.
A. New York is notorious as one of the highest taxing states in the U.S. What you are seeing on your paystub are legitimate taxes that are required in the State of New York. Medicare is a tax required of employees at the rate of 1.45% of taxable wages. There is no limit to this tax. Your employer matches that rate. According the this document on the Medicare.gov website, “Medicare is health insurance for people age 65 or older, under age 65 with certain disabilities, and any age with permanent kidney failure (called “End-Stage Renal Disease”). The payroll deduction and match by your employer is helping to fund the Medicare system in our country.
State SDI NY is the disability insurance required by your state. If you become disabled in most states, you are out of luck unless you carry private disability insurance. In New York, there are two options. The fir method is a payroll deduction that looks like this, 0.50% to maximum of $0.60 (source here). Employers must offer disability insurance but are not required to withhold the premium from employee checks. The second method is that employers can cover the cost of the premium without a payroll deduction. In your case, it looks like the employer is charging you.
NY is the state withholding tax for the state of New York. It is required and is based on your selections in this document. NY CNY is the required withholding for residents of New York City.
On a side note, as of May 2009, there is yet another tax required for employer who have employees working in certain areas of New York city called the MCTMT. It is designed to fund the public transit system in the city. You won’t see this on your check, but it is important to know how much you actually cost your employer.
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By melimank, August 10, 2009 @ 2:51 pm
The MCTMT tax will not affect employee taxes and as such most likely not show on an employee’s stub; it is only an employer tax with no employee contribution at this time.
By CPA Sam, August 10, 2009 @ 3:35 pm
Thanks for the notification. I have updated the post to reflect my new-found understanding of this tax.