New York Consolidated Laws, Tax Law - TAX § 678. Liability of third parties paying or providing for wages

(a) Direct payment by third party.--If a lender, surety or other person, who is not an employer with respect to an employee or group of employees, pays wages directly to such an employee or group of employees, employed by one or more employers, or to an agent on behalf of such employee or employees, such lender, surety or other person shall be liable for the amount of taxes (together with interest) required to be deducted and withheld from such wages by the employer.

(b) Funds supplied to employer by third parties.--If a lender, surety or other person supplies funds to or for the account of an employer for the specific purpose of paying wages of the employees of such employer, with actual notice or knowledge that such employer does not intend to or will not be able to make timely payment or deposit of the amounts of tax required by this article to be deducted and withheld by such employer from such wages, such lender, surety or other person shall be liable for the amount of the taxes (together with interest) which are not paid over to the tax commission by such employer with respect to such wages.  However, the liability of such lender, surety or other person shall be limited to an amount equal to twenty-five percent of the amount so supplied to or for the account of such employer for such purpose.

(c) Effect of payment.--Any amounts paid to the tax commission pursuant to this section shall be credited against the liability of the employer.