New York Employer Compensation Expense Program Registration Ends December 1

New York State recently established the Employer Compensation Expense Program allowing employers to elect to pay an Employer Compensation Expense Tax on payroll expenses paid to covered employees, which in turn allows the employees to take a credit against their New York State personal income tax. Employers must make the initial annual employer election by December 1, but due to several factors and unanswered questions, many employers have steered clear of the program.

The 2017 federal tax legislation, commonly referred to as the "Tax Cuts and Jobs Act," caps an individual's itemized deduction for state and local taxes at $10,000 per year for tax years beginning after December 31, 2017 through 2025. In an effort to mitigate the effects of this deduction limitation, the New York State (NYS) legislature established the Employer Compensation Expense Program (ECEP) in the state's 2018–2019 Fiscal Year Budget Bill,¹ which was signed into law on April 12, 2018 by Governor