Determining Withholding Allowances

Ideally, employees should adjust withholding allowances so that neither the employee nor the taxing authority owes the other a balance at the end of the tax year. To accomplish this, you may adjust the number of allowances based on:

  • Income from other jobs
  • Qualifying home mortgage interest
  • Charitable contributions
  • State and local taxes (except sales tax)
  • Medical expenses

There is also an optional entry on both certificates that permits you to have more money withheld from your pay to reduce the amount of taxes you'll owe at the end of the year.

The Internal Revenue Service (IRS) and the New York State Department of Taxation & Finance (NYS) provide detailed instructions and worksheets for determining the appropriate number of withholding allowances.