New York State Income Tax and Other Taxes
The state has some of the highest tax rates in the nation
The State of New York imposes all three major taxes: It has an income tax, a sales tax, and property taxes. The state consistently tops lists for having the rates for these taxes in the nation, and it also imposes an estate tax.
New York State Income Tax
New York State income tax rates range from 4% to 8.82% as of 2019, depending on a taxpayer's income. The lowest rate applies to the first $8,499 of taxable income for single filers, and it increases incrementally from there. The highest rate of 8.82% is applicable to incomes exceeding $1,077,550 for single taxpayers.
These income thresholds stretch to $17,149 at 4% for married taxpayers filing jointly, and to $2,155,350 for the 8.82% rate.
Government pensions and pensions from certain government authorities are exempt from income tax in New York.
New York City has its own tax rates.
The Standard Deductions
New York's standard deductions also depend on filing status. As of the 2018 tax year—the return you'd file in 2019—they are:
- Single and you're someone else's dependent on a federal return: $3,100
- Single and you're not someone else's dependent on a federal return: $8,000
- Head of household: $11,200
- Married filing jointly: $16,050
- Married filing separately: $8,000
- Qualifying widow(er): $16,050
Itemized Deductions and Tax Credits
Most federal itemized deductions are allowed on New York returns. Deductions are available for college tuition and for contributions to the New York 529 plan.
There are also several tax credits available for expenses like child and dependent care costs, The state has its own version of the earned income credit. It's 30% of the amount of your federal credit as of 2019.
New York Property Taxes
New York has no tax on personal property, such as vehicles and jewelry, but there are property taxes on real estate. These taxes are actually paid to local governments such as counties, cities, and school districts. The state does not take a cut of these revenues. All property tax revenues go directly to the localities for their schools, police and fire departments, road maintenance, and other services.
Property tax rates are determined by localities, and they depend heavily on the needs of their yearly budgets. Counties in upstate New York have some of the highest property taxes in U.S.
Under state law, most counties and municipalities must assess property taxes at a uniform percentage of value. The law does not say how much that percentage must be, and it can range anywhere from 5% up to 99%, although it cannot be 100%. The law merely requires that all properties are treated equally and are charged the same.
Property Tax Exemptions
State law allows localities to grant property tax exemptions to senior citizens, veterans, or people with documented disabilities.
The STAR exemption applies to owners of residential property who use their properties as their primary residences. STAR stands for the School Tax Relief program, and it offers an exemption for a portion of a home’s value from school taxes.
Seniors age 65 and older can qualify for an enhanced STAR exemption if their incomes to do not exceed the state standard, which can change annually. It's $86,300 in 2019 and slated to increase to $88,050 in 2020.
The STAR program was updated in 2019 to require that all recipients enroll in the Income Verification Program. First-time recipients and new homeowners must now apply for the credit with the New York Tax Department.
New York Estate Tax
New York's estate tax is based on the overall value of a decedent’s estate, provided that the decedent was a New York resident or owned real or tangible personal property within the state.
Estates valued at $5,740,000 are exempt from the estate tax for deaths that occur on or after January 1, 2019 through January 1, 2020. This exclusion is indexed for inflation, so it increases annually. The top tax rate for 2019 is 16% on estates with values of more than $10.1 million. Smaller estates pay rates ranging from 3.06% to 15.2%.
You must include the value of certain gifts made during your lifetime to the value of your estate, but there are exceptions for gifts made prior to April 1, 2014 or between January 1 and January 15, 2019. This tax provision was renewed in 2019 and it continues through at least January 1, 2026.
The state does not additionally tax specific inheritances.
Sales and Other Taxes
The state's sales tax has been set at 4% since June 1, 2005, but local municipalities can add up to 5%. Food, prescription drugs, and non-prescription drugs are exempt, as are clothing and footwear costing less than $110 per item.
The state imposes a combined motor fuel tax, petroleum testing fee, gasoline sales tax and gas excise tax at a whopping 60.72 cents a gallon. The state gas tax alone is 45.6 cents a gallon as of 2019. The cigarette tax is $4.35 per pack of 20.
State of New York Tax Rate Summary
New York continues to have some of the highest tax rates in the country. Its standard deductions are less than those at the federal level:
- Income tax rates: 4% to 8.82%
- Standard deductions: $3,100 to $16,050
- Estate tax rates: 3.06% to 16%
- Sales tax: 4% plus up to 5% added on by municipalities