New York Employer Compensation Expense Program (ECEP)
Background
The state of New York Employer Compensation Expense Program (ECEP) has established an optional Employer Compensation Expense Tax (ECET) effective January 1, 2019 that employers can choose to pay if they have employees that earn over $40,000 annually in New York State. Employees earning over $40,000 are eligible to take a tax credit on their income tax return. For more details, see the state of New York Employer Compensation Expense Program website.
The tax was phased in over the first three years at the following rates:
- 2019: 1.5%
- 2020: 3%
- 2021 and after: 5%
How to Set Up ECEP Tax
- Go to Settings > Payroll Settings > NY Employer Compensation Expense Program.
- Answer “Have you made an affirmative election to participate in the ECEP?”
- If you choose “Yes,” you may need to select the calendar year that you have elected to participate.
- Your actual election to participate in the ECEP is made directly on your New York Business Services Online account.
- Your “yes/no” answer in Patriot will carry forward to future years unless you change your answer.
If you do participate, Patriot Software will only calculate the ECEP tax, but will not collect, deposit or file this tax. This is your responsibility. Patriot will calculate the tax for for participating employers who have employees working in New York state. The tax will calculate on employees who meet the following:
- Have wages subject to New York State Income Tax and Medicare
- The wages are greater than $40,000 with no limit.
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