New York State Income Tax
New York State income tax rates range from 4% to 10.90%% for the 2022 tax year, depending on a taxpayer’s income. These rates are the result of legislation passed and sent to the governor in April 2021. The 10.90% rate is an increase from 8.82%. These rates became effective in 2021. They’ll remain in place through tax year 2027. The lowest rate of 4% applies to the first $8,500 of taxable income for single filers and the first $17,150 for taxpayers who are married filing jointly. The tax rate then increases incrementally based on income. The highest rate of 10.90% is applicable to incomes exceeding $25 million for taxpayers who file as single, head of household, or married filing jointly.
The Standard Deductions
New York’s standard deductions also depend on filing status. As of the 2021 tax year (the return you’ll file in 2022) they were:
Single and you’re someone else’s dependent on a federal return: $3,100Single and you’re not someone else’s dependent on a federal return: $8,000Head of household: $11,200Married filing jointly: $16,050Married filing separately: $8,000Qualifying 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 State 529 plan. Several tax credits are available for expenses such as child and dependent care costs. The state has its own version of the earned income credit.
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 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 local services. Most counties and municipalities must assess property taxes at a uniform percentage of value according to state law. Properties of equal value in the same community should pay the same amount in property taxes without accounting for exemptions. The owners of more valuable properties will pay more in taxes than the owner of less valuable properties.
Property Tax Exemptions
State law allows localities to grant property tax exemptions to senior citizens, veterans, or people with documented disabilities. The School Tax Relief (STAR) exemption applies to owners of residential property who use their properties as their primary residences. STAR 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 do not exceed the state standard, which can change annually. The income limit was $90,550 for tax year 2021. It increases to $92,000 for 2022.
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 $5,930,000 or less are exempt from the estate tax for deaths that occur on or after January 1, 2021, through January 1, 2022. This exclusion is indexed for inflation. It increases to $6,110,000 for deaths that occur in 2022. The top tax rate for 2021 was 16% on estates with values of more than $10.1 million. Smaller estates pay rates ranging from 3.06% to 15.2%.
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 8.88%. Food, prescription drugs, and non-prescription drugs are exempt, as are clothing and footwear costing less than $110 per item. The state imposes motor fuel taxes including:
Motor fuel excise taxPetroleum business taxPetroleum testing fee
The state gasoline tax was 32.98 cents per gallon as of February 2021. State and federal taxes together are 51.38 cents per gallon. The cigarette tax is $4.35 per pack of 20.
