NYC-1127 Withholding Tax

Forum|Forum|4 months ago
March 1, 2026
1 reply
12 views

How do some of you show the 1127 taxes on your schedule A so that it does not get picked up on the State return. When you add it into local taxes, proseries naturally then shows this as NYC taxes withheld, which it is, but as we know, it should be applied to the NYC return, not the state return.

So how do some of you show this? I would normally add it into the Schedule A as other taxes, but then it does not get limited to the 40k which it should.

Thanks in advance!

ProSeries Basic

Best answer by MICHAELMARS

From 1127 instructions

NOTE: The payment required by
Section 1127 of the New York City
Charter is not a payment of any City
tax, but is a payment made to the
City as a condition of employment. If
you are subject to the filing requirements of the City Resident Income
Tax during any part of 2025, you
must file tax returns with the New
York State Department of Taxation
and Finance in the manner and at
the time provided in the instructions
for the State tax forms, regardless of
any obligation you may have under
Section 1127 of the Charter.

M

MICHAELMARS

Level 6

Its not considered a tax, it is a condition of employment. This used to be deducted subject to 2% misc deductions.

A

ansky127Author

Level 3

Thanks for the response. I totally understand what you are saying and used think of it that way as well.

I have researched this and everything is telling me that it is in fact deductible. Am I wrong? I mean the whole point of it is to get noncity residents to pay their share as if they were a resident. Sounds like a tax to me. No?

Per TAX GPT below (there was a lot more to support it as well) -

Bottom line: The NYC‑1127 payment is computed and administered as a New York City income tax liability. If you itemize and choose to deduct state and local income taxes, it is taken on Schedule A as a state/local income tax (subject to the SALT cap), not as a “2% miscellaneous” deduction ; . The structure of the NYC‑1127 form—liability rates, withholding, and offsetting NYC credits—confirms its treatment as a tax

I can't find anywhere that says you can't take this as a tax deduction...Please let me know if you do see that somewhere. Thank you!

M

MICHAELMARSAnswer

Level 6

From 1127 instructions

NOTE: The payment required by
Section 1127 of the New York City
Charter is not a payment of any City
tax, but is a payment made to the
City as a condition of employment. If
you are subject to the filing requirements of the City Resident Income
Tax during any part of 2025, you
must file tax returns with the New
York State Department of Taxation
and Finance in the manner and at
the time provided in the instructions
for the State tax forms, regardless of
any obligation you may have under
Section 1127 of the Charter.

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