It’s bad enough to worry about filing your federal income taxes, but if you live in New York, your income state taxes are some of America’s highest.
Where you live in New York will greatly determine what you pay in taxes, with certain boroughs and areas charging far more for local taxes than their neighbors. New York residents are taxed differently from nonresidents, too, and estate and property laws are only made worse by unequal wealth distribution within inner-city boroughs.
With such a high influx of commuters infiltrating New York City each day, New York has a lot of nonresidents who file not just a federal tax return but a New York state tax return, as well. That means big revenue for the state, especially given the high tax rates.
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New York State Income Tax
- Your federal adjusted gross income exceeds $4,000 as an individual or $3,100 as a single dependent;
- You plan to receive a refund from Yonkers, New York City, or the New York City Metropolitan Transportation Authority (NYC MTA), or;
- You want to claim or rollover existing credits via New York State Tax Form IT-201.
If you work in New York City but do not live within the five boroughs, you must file Form NYC-1127. Partial-year residents and nonresidents must file a Nonresident and Part-Year Resident Income Tax Return using New York State Form IT-203.
New York income tax rates range from 4% to 8.82% for 2019.
New York State Income Tax Rates
|Tax Rate||Separate Single or Married Filing||Head of Household||Married Joint Filing or Qualified Widow|
|4%||$8,500 and below||$12,800 and below||$17,150 and below|
|4.5%||$8,501 to $11,700||$12,801 to $17,650||$17,151 to $23,600|
|5.25%||$11,701 to $13,900||$17,651 to $20,900||$23,601 to $27,900|
|5.9%||$13,901 to $21,400||$20,901 to $32,300||$27,901 to $43,000|
|6.33%||$21,401 to $80,650||$32,201 to $107,650||$161,551 to $323,200|
|6.57%||$80,651 to $215,400||$107,651 to $269,300||$161,551 to $323,200|
|6.85%||$215,401 to $1,077,550||$269,301 to $1,606,450||$323,201 to $2,155,350|
|8.82%||$1,077,551 and up||$1,616,451 and up||$2,155,351 and up|
The exact percentage depends on where you live. Yonkers, New York City (NYC), and the NYC MTA all face steep income taxes that far exceed neighboring areas due to the following:
- New York City assesses a 2.907% city tax, with a higher rate of 3.876% for those earning more than $500,000 each year.
- The NYC MTA faces an additional earned income tax of 0.34%.
- Nonresident Yonkers employees pay an additional 0.50%.
It adds up quickly, but there are several property tax exemptions that help to alleviate an otherwise heavy tax burden.
Standard New York State Deductions
|Head of Household||$11,200|
|Married joint return||$16,050|
|Married separate returns||$8,000|
|Widow (conditions apply)||$16,050|
New York State Sales Tax
Sales tax remains a top source of state revenue for the many jurisdictions throughout New York. Several cities in New York assess just a 4.5% city sales tax rate on most retail purchases and services, but New York City sales tax is nearly double at 8.875%.
Certain retailers and services are subject to special tax rates and exemptions. Purchases of clothing and footwear under $110 are waived from both New York and NYC sales tax, while parking, garaging, and storing motor vehicles in Manhattan costs you a 10.375% tax with an additional 8% surtax. Some residents are able to utilize the Manhattan Resident Parking Tax Exemption program to pay 10.375% instead.
Unsure of the tax rate for where you live? New York’s Department of Taxation and Finance offers a convenient online tool you can use to look up your tax jurisdiction and rate using your address.
New York State Property Tax
City and local governments are free to impose local property tax in addition to state taxes. New York taxes land that is defined as real property and uses the county-assessed value to determine how much tax you should pay. These funds are then used to benefit a number of public services and works, such as schools, roads, and emergency services. The state raises an estimated $55 billion each year from local property taxes.
However, New York is known for several beneficial property tax exemptions that make property ownership all the more attractive here. The State Comptroller’s office reports that over 60% of New York land value is actually exempt from taxes. This includes exemptions for veterans, clergy, farmers, and the disabled.
New York State Estate Tax
An estate tax is a tax imposed on the value of your estate after you die. Every so often, New York adjusts its estate tax rates to account for inflation. The most recent adjustment was on January 1, 2019, when the New York estate tax exemption amount was changed to $5,000,000. The maximum tax rate remains at 16%.
New York is considered a cliff tax state, which means that there are no exemptions given when the estate value is more than 105% of the current exemption. Any taxable gifts made within a three-year period of death between April 1, 2014, and December 31, 2018, are considered part of the estate for tax calculation purposes.
You are responsible for filing a New York State estate tax return if the amount of the federal gross estate and the number of eligible gifts is more than the basic exclusive amount that was active at the time of death.
If you’re a nonresident, you also must pay estate tax in New York if you have real or tangible property located in the state. To be liable for this tax, the value of your property and gifts must exceed the basic exclusion amount applicable at the time of death.
Other Taxes in New York State
Part of what makes New York so expensive is the high taxation on everyday items. In New York, you can expect to pay the following taxes:
- Cigarettes: $4.35 excise tax per one pack of 20 cigarettes;
- New York City charges an additional $1.50 local excise tax, for a total of $5.85 per pack of 20 cigarettes.
- Retail sales: 4% sales tax on tangible personal property and specific services;
- Gas: 17.7 cents per gallon.
New York taxes can easily make an already expensive state even worse, topping off an already high cost of living and making life that much more difficult. However, if you are able to take advantage of the many property and tax exemptions that the state offers, it certainly can be affordable to live in the Empire State.
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