Bottom Line
Middle-Class Families: Least Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Least Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)
New York's state income taxes are generally average for most residents. However, New York City and Yonkers tack on their own income taxes, and there's a commuter tax for people working in and around the Big Apple.
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Things start to get bad when you look at sales taxes. New York's average combined state and local sales tax rate is the 10th-highest in the country, according to the Tax Foundation.
And then things go from bad to worse when property taxes are added to the mix. New York's median property tax rate is the sixth-highest in the U.S. New York also has an estate tax with a special "cliff" feature that can result in a big tax bill when you die.
New York Income Taxes
New York Income Tax Range
Low: 4% (on up to $8,500 of taxable income for single filers and up to $17,150 for married couples filing jointly)
High: 10.9% (on taxable income over $25 million, regardless of filing status)
Beginning in 2028, the highest rate will decrease to 8.82% on taxable income over $1,077,550 for single filers and over $2,155,350 for married couples filing jointly.
New York City and Yonkers impose their own income tax. A commuter tax is also imposed on residents of New York City, as well as on residents of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester Counties.
New York Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
New York Tax Breaks for Other Retirement Income
Income from federal government, New York state and local government, and military retirement plans is exempt.
In addition, taxpayers age 59 1/2 and older can exclude up to $20,000 of federally-taxed income from private retirement plans or government plans from another state.
Railroad Retirement benefits are fully exempt.
New York Sales Tax
4% state levy. Localities can add as much as 4.875%, and the average combined rate is 8.52%, according to the Tax Foundation. In the New York City metro area, there is an additional 0.375% sales tax to support transit.
- Groceries: Exempt
- Clothing: Exempt if under $110
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
New York Real Property Taxes
In New York, the median property tax rate is $1,620 per $100,000 of assessed home value.
New York Property Tax Breaks for Retirees
New York State law gives local governments and public-school districts the option of granting a reduction on the amount of property taxes paid by qualifying senior citizens by reducing the assessed value of residential property owned by seniors by 50%. To qualify, seniors must be 65 or older and meet certain income limitations and other requirements. For the 50% exemption, the law allows each county, city, town, village or school district to set the maximum income limit between $3,000 and $50,000. Under the so-called sliding-scale option, localities may also grant an exemption of less than 50% to senior citizens with yearly incomes over $50,000 but less than $58,400.
There is also an Enhanced STAR program for seniors. The Enhanced STAR exemption is available for the primary residences of senior citizens (age 65 and older) with annual household incomes not exceeding the statewide standard. Combined income must be $92,000 or less for 2022 benefits ($93,200 or less for 2023 benefits). For qualifying senior citizens, the Enhanced STAR program exempts part of the value of their home from school property taxes.
New York Motor Fuel Taxes
Gasoline: 48.22¢ per gallon (49.02¢ per gallon effective January 1, 2023; varies by county).
Diesel: 46.98¢ per gallon (47.78¢ per gallon effective January 1, 2023; varies by county).
New York Sin Taxes
Cigarettes and little cigars: $4.35 per pack (in New York City, an extra $1.50 per pack)
Snuff: $2 per container one ounce or less, $2 per ounce for larger containers
Cigars and other tobacco products: 75% of the wholesale price
Vapor products: 20% of retail price
Beer: $0.14 per gallon (New York City charges an additional $0.12 per gallon)
Wine: $0.30 per gallon
Liquor: $6.44 per gallon for liquor containing more than 24% alcohol by volume (New York City charges an additional $1 per gallon); $2.54 per gallon for liquor containing more than 2% but less than 24% alcohol by volume
Marijuana: Distributors taxed at rate of five-tenths of one cent per milligram of THC for cannabis flower, eight-tenths of one cent per milligram of THC for concentrated cannabis, and three cents per milligram of THC for cannabis edible products; 9% state tax on retail sales; 4% local tax on retail sales may also apply
New York Estate and Inheritance Taxes
For 2023, estates exceeding $6.58 million are subject to New York's estate tax. Taxable gifts made by the decedent as a New York resident within three years prior to death are included as part of the estate. Tax rates range from 3.06% to 16%.
The New York estate tax is a "cliff tax." That means if the value of the estate is more than 105% of the current exemption, the exemption won't be available and the entire estate will be subject to state estate tax.
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