(a) Employer. Employer means an employer that is required by section six hundred seventy-one of this chapter to deduct and withhold tax from wages.

(b) Electing employer. Electing employer is an employer that has made the election provided for in section eight hundred fifty-one of this article.

(c) Payroll expense. Payroll expense means wages and compensation as defined in sections 3121 and 3231 of the internal revenue code (without regard to section 3121(a)(1) and section 3231(e)(2)(A)(i)), paid to all covered employees.

(d) Covered employee. Covered employee means an employee of an electing employer who is employed in New York, who is required to have amounts withheld under section six hundred seventy-one of this chapter, and who receives annual wages and compensation from his or her employer of more than forty thousand dollars annually. The determination of whether an employee is a covered employee under this article will be made by utilizing the rules applicable to the jurisdiction of employment for purposes of the statewide wage reporting system under section one hundred seventy-one-a of this chapter.