If you live in (or are considering moving to) New York, consider how New York state tax could impact your overall financial burden. New York is known for its high cost of living, and the tax burden plays a significant role in what it costs New Yorkers to live there.
Overall, New York's income tax rates, property taxes, and sales tax make it one of the highest-taxed states in the U.S., but it is not without its perks.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
New York state tax: Income taxes
New York has fairly high-income tax rates, and New York City's are even higher, ranging from an additional 3.078% to 3.876%. However, the state is generally tax-friendly when it comes to some types of retirement income.
New York tax on retirement benefits: New York does not tax Social Security benefits. Additionally, retirement income from the federal government, New York state and local government, and military retirement plans is tax exempt. Railroad retirement benefits are also tax-exempt.
Note: 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.
New York Income Tax Range: Single filers and married filing separately
| Header Cell - Column 0 | Header Cell - Column 1 |
|---|---|
| $8,500 or less | 4% of taxable income |
| $8,501 to $11,700 | $340 plus 4.5% of income over $8,500 |
| $11,701 to $13,900 | $484 plus 5.25% of income over $11,700 |
| $13,901 to $80,650 | $600 plus 5.85% of income over $13,900 |
| $80,651 to $215,400 | $4,504 plus 6.25% of income over $80,650 |
| $215,401 to $1,077,550 | $12,926 plus 6.85% of income over $215,400 |
| $1,077,551 to $5,000,000 | $71,984 plus 9.65% of income over $1,077,550 |
| $5,000,001 to $25,000,000 | $450,500 plus 10.3% of income over $5,000,000 |
| More than $25,000,000 | $2,510,500 plus 10.9% of income over $25,000,000 |
New York Income Tax Range: Married filing jointly
| Row 0 - Cell 0 | Row 0 - Cell 1 |
| $17,150 or less | 4% of taxable income |
| $17,151 to $23,600 | $686 plus 4.5% of income over $17,150 |
| $23,601 to $27,900 | $976 plus 5.25% of income over $23,600 |
| $27,901 to $161,550 | $1,202 plus 5.85% of income over $27,900 |
| $161,551 to $323,200 | $9,021 plus 6.25% of income over $161,550 |
| $323,201 to $2,155,350 | $19,124 plus 6.85% of income over $323,200 |
| $2,155,351 to $5,000,000 | $144,626 plus 9.65% of income over $2,155,350 |
| $5,000,001 to $25,000,000 | $419,135 plus 10.3% of income over $5,000,000 |
| More than $25,000,000 | $2,479,135 plus 10.9% of income over $25,000,000 |
New York Income Tax Range: Head of household
| Row 0 - Cell 0 | Row 0 - Cell 1 |
| $12,800 or less | 4% of taxable income |
| $12,801 to $17,650 | $512 plus 4.5% of income over $12,800 |
| $17,651 to $20,900 | $730 plus 5.25% of income over $17,650 |
| $20,901 to $107,650 | $901 plus 5.85% of income over $20,900 |
| $107,651 to $269,300 | $5,976 plus 6.25% of income over $107,650 |
| $269,301 to $1,616,450 | $16,079 plus 6.85% of income over $269,300 |
| $1,616,451 to $5,000,000 | $108,359 plus 9.65% of income over $1,616,450 |
| $5,000,001 to $25,000,000 | $434,871 plus 10.3% of income over $5,000,000 |
| More than $25,000,000 | $2,494,871 plus 10.9% of income over $25,000,000 |
New York sales tax
The state sales tax rate is 4%, but New Yorkers pay a higher rate since localities can add as much as 4.875%. In the New York City metro area, there is an additional 0.375% sales tax to support transit.
Note: One of the potential perks of living in New York is not having to pay sales tax on things that people in some other states do.
- Groceries are tax-exempt.
- Clothing purchases under $110 are not taxable.
- Prescription drugs are tax-exempt.
- There is no sales tax on diapers.
- New York has banned the "pink tax."
How much are property taxes in New York?
In New York, the median property tax rate is 1.72%, and the average property tax bill is $3,749, making it one of the most expensive in the U.S. Thankfully for adults over age 65, property taxes could cost less.
New York Property Tax Breaks for Retirees
Property tax exemption for adults over age 65: New York law gives local governments and public school districts the option of granting a reduction on the amount of property taxes paid by qualifying adults over age 65 by reducing the assessed value of residential property by 50%. Older adults (aka seniors) over age 65 must meet certain criteria to qualify.
- Must be 65 or older
- Have a maximum income between $3,000 and $50,000 (varies by county, city, town, and school district)
- If income is over $50,000, some property owners may qualify for a partial exemption of between 5% and 20%.
Enhanced STAR program for adults over age 65: The Enhanced STAR program exempts part of a home's value from school property taxes. Adults over age 65 must meet criteria to qualify for the tax break, and the property must be their primary residence.
- Adults must be 65 or older (or turn 65 in the calendar year they apply).
- Cannot have an income above $93,200 (includes income of resident spouses and domestic partners)
New York gas taxes (motor fuel)
Motor vehicle purchases are taxable at state and local sales tax rates, but residents do not need to pay a personal property tax.
Motor fuel taxes average $0.48 but can vary by county. New York motor vehicle tax is among the highest in the country.
New York alcohol and tobacco taxes
| Cigarettes and little cigars | $5.35 per pack ($6.85 in NYC) |
| Snuff | $2 per ounce ($2 for single container if under 1 ounce) |
| Cigars | 75% of wholesale price |
| Vapor products | 20% of retail price |
| Beer | $0.14 per gallon (additional $0.12 in NYC) |
| Wine | $30 per gallon |
| Liquor (more than 24% alcohol by volume) | $6.44 per gallon (additional $1 per gallon in NYC) |
| Liquor (under 24% alcohol by volume) | $2.54 per gallon |
| Marijuana | 13% for personal use |
New York estate and inheritance taxes
There is no inheritance tax in New York, but there is an estate tax. 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 "tax cliff." 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.
Related Content
-
Year-End Tax Planning for a Financially Healthier RetirementGetting your tax ducks in a row for the end of the year can decrease your tax liability and make the most of your income, now and in retirement.
-
Where to Start Financially After a Life-Changing Diagnosis
Dealing with an illness, yours or your child’s or that of another loved one, is hard enough without adding financial duress. Here are some considerations and suggestions for covering expenses.
-
Capital Gains Tax on Real Estate and Home Sales
Capital Gains Tax Selling your home or a rental property? Here are important capital gains tax rules to keep in mind.
-
Another Big IRS Tax Change for Online Sellers
Selling Online Just in time for the holidays, the IRS is delaying a significant tax 1099-K reporting requirement for 2023.
-
Tax-Deductible Black Friday Deals for the Self-Employed
Black Friday Deals Some Black Friday deals can help the self-employed save on business expenses and taxes.
-
Did You Overpay for Thanksgiving Dinner?
Thanksgiving 2023 marks the second most expensive Thanksgiving dinner in history. But how much it cost depended on what you bought, where you live — and whether your state taxes groceries.
-
Most Expensive States for Retired Military Service Members
Military Retirement Veterans can keep more of their military retirement pay by avoiding these high-taxed, most expensive states for retired service members.
-
2023 401(k) Contribution Deadline Coming Soon
401(k) Contributions Year-end is the deadline for making max 401(k) contributions that can increase your savings for retirement and help lower your tax bill.
-
10 Worst States To Retire in if You Hate Paying Taxes
State Taxes Relatively high tax burdens make these places the worst states to retire.
-
Charitable Donations: What To Know About Scams and Taxes Before You Give
Donations Giving to a charity can make you feel good and lower your tax bill, but the IRS says to beware of fake charities.
