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 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 January 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 there.
New York City Income Tax Rates
New York City has nine tax brackets ranging from 4% to 10.9%. 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 $8,500 for tax year 2022. Those who are married and who file joint returns qualify for the lowest rate on incomes of up to $17,150.
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, although there are income tax credits.
New York City Income Tax Credits
Tax credits reduce the amount of income tax you owe. They come directly off any tax you owe to the taxing authority. Some credits are refundable—you’ll receive a refund of any portion of the credit that’s left after reducing your tax liability to zero.
The NYC Child and Dependent Care Credit
Full-year and part-year New York City residents who paid child care expenses for children under age 4 might be eligible to claim the Child and Dependent Care Credit. To qualify, your federal adjusted gross income (AGI) must be $30,000 or less. The credit amount can be as much as 75% of the corresponding New York State 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
Full-year residents and part-year residents of NYC who qualify for and claim the federal Earned Income Credit may be able to 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 start at $15 to $210 depending on your filing status and household size.
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 an 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. You may be eligible for a reduced school tax credit if your income is more $250,000 but $500,000 or less.
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 website. You can file your return by mail or e-file it. New York City’s taxes are due by April 15 in most years. They should be paid along with your New York state income tax.
