New York City Income Tax—Rates and Available Credits
Tax Rates, Tax Credits, and Filing Information for NYC
New York City is one of just a few cities in the U.S. that has a personal income tax. The New York City tax is calculated and paid on the New York State income tax return. New York City's tax code doesn't include any deductions, but the city does offer some credits of its own, separate from those the state offers.
Who Must Pay New York City Income Tax?
Every income-earning individual, estate, and trust residing or located in New York City must pay the city's personal income tax. Taxpayers who live in NYC for only part of the year can calculate their tax based on the number of days they resided there.
New York City government employees who were hired on or after Jan. 4, 1973, must pay the tax even if they don't live in the city. They must pay a city income tax equal to what they would have paid had they resided in the city.
The city tax is in addition to any income tax you might owe the state of New York.
New York City Income Tax Rates
New York City has four tax brackets, ranging from 3.078% to 3.876%. Rates kick in at different income levels depending on your filing status.
The lowest rate applies to single and married taxpayers who file separate returns on incomes of up to $12,000 as of 2020. Those who are married and who file joint returns qualify for the lowest rate on incomes of up to $21,600. The next tax brackets jump to 3.762%, then to 3.819%, then to 3.876%.
New York City Income Tax Deductions
New York City's income tax is based on your New York State taxable income, which is your gross income less any New York State tax deductions you can claim. There are no tax deductions specifically for the New York City income tax.
New York City Income Tax Credits
Tax credits reduce the amount of income tax you owe. They come directly off your liability to the taxing authority. Some credits are refundable—you'll receive a refund of any portion of the credit that's left over after reducing your tax liability to zero.
New York City offers several tax credits. They can offset what you owe the city, but they won't affect the amount of New York State income tax you might owe.
The NYC Child and Dependent Care Credit
Full-year and part-year New York City residents who paid child care expenses for children under the age of four might be eligible to claim the Child and Dependent Care Credit.
Your household federal adjusted gross income (AGI) must be no more than $30,000 as of 2020. The credit amount can be as much as 75% of your New York State dependent care credit, depending on your income. You can claim both the city and state credit if you qualify. This is a refundable credit.
The NYC Earned Income Credit
The New York City Earned Income Tax Credit is equal to 30% of your allowable federal Earned Income Tax Credit reduced by your NYC Household Credit if you qualify for and claim that. Full-year residents and part-year residents of NYC who qualify for and claim the federal Earned Income Credit can claim the New York City Earned Income Credit.
New York State offers an Earned Income Credit as well. You can still qualify for an NYC Earned Income Credit even if you don't qualify for the state credit, and you can claim both if you do qualify for the state credit. This tax credit is also refundable.
The NYC Household Credit
You might qualify for the New York City Household Credit if you can't be claimed as a dependent on another taxpayer’s federal income tax return. This credit is available to resident and part-year residents of New York City.
The amount of the credit is determined by your income and filing status. Credit amounts range from $15 to $30 with an additional $10 to $30 for each additional exemption claimed on your federal return.
The NYC School Tax Credit
The New York City School Tax Credit is available to New York City residents or part-year residents who can't be claimed as dependents on another taxpayer’s federal income tax return. You can take a refundable credit of $125 if you're married, file a joint return, and have income of $250,000 or less. All other taxpayers with incomes of $250,000 or less can receive a refundable credit of up to $63.
No credit is allowed for taxpayers with incomes of more than $250,000.
The NYC Enhanced Real Property Tax Credit
This credit is offered to renters and homeowners living in residences that weren't totally exempted from real property taxes during the tax year. Your household income must be less than $200,000 as of 2020.
You must have resided within the city for the entire year and in the same residence for at least six months. You can't be claimed as a dependent on anyone else's federal tax return. This credit can be as much as $500.
Filing Your NYC Return
The New York City personal income tax is filed with New York State with your state return. Forms can be found on the New York Department of Taxation and Finance's website. You can file your return by mail or e-file it.
New York City government employees must file an additional tax form—Form NYC-1127.
New York City's taxes are due by April 15 in most years and should be paid along with your New York State income tax.
New York State Department of Taxation and Finance. "Income Tax Definitions." Accessed Oct. 31, 2020.
New York City Department of Finance. "2019 NYC-1127 Form," Page 3. Accessed Oct. 31, 2020.
Property Club. "New York City Income Tax Guide." Accessed Oct. 31, 2020.
New York City Department of Finance. "Tax Credit Fast Facts 2020." Accessed Oct. 31, 2020.
New York State Department of Taxation and Finance. "Earned Income Credit (New York State)." Accessed Oct. 31, 2020.
New York State Department of Taxation and Finance. "Instructions for Form IT-201 Full-Year Resident Income Tax Return," Page 24. Accessed Oct. 31, 2020.
New York State Department of Taxation and Finance. "New York City Credits." Accessed Oct. 31, 2020.