Tax in New York: a complete guide

1 min readLast updated January 11, 2024by Rachel Carey

This New York State tax system guide covers everything you need to know about tax in New York including income tax requirements and sales and property taxes.

Summary

  • New York has the highest tax burden of any 50 states.

  • What you’ll pay in taxes to live in New York City, one of the US’s most expensive metropolitan areas, is worlds away from what you’ll pay in taxes to live on the outskirts of Albany. 

  • The state tax system for individuals is graded, with rates ranging from four percent to 10.9 percent.

  • Speak to a financial advisor about getting your tax and finances in order.

New York income tax  

Alongside your federal income tax burden, you must account for state income tax if you choose to live in New York.  

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The state tax system for individuals is graded, with rates ranging from four percent to 10.9 percent across a total of nine income brackets:

1. A single person OR a married person/registered domestic partner filing separately 

IncomeState income tax amount
$0-$8,500 four percent of your income
$8,501-$11,700 $340, and 4.5 percent over $8,500
$11,701-$13,900 $484, and 5.25 percent over $11,700
$13,901-$80,650 $600, and 5.85 percent over $13,900
$80,651-$215,400 $4,504, and 6.25 percent over $80,650
$215,401-$1,077,550 $12,926, and 6.85 percent over $215,400
$1,077,551-$5,000,000 $71,984, and 9.65 percent over $1,077,550
$5,000,001-$25,000,000 $450,500, and 10.30 percent over $5,000,000
$25,000,001 upwards $2,510,500, and 10.90 percent over $25,000,000

2. A married person/ registered domestic partner filing jointly OR a qualifying widower 

IncomeState income tax amount
$0-$17,150 four percent of your income
$17,151-$23,600 $686, and 4.5 percent over $17,150
$23,601-$27,900 $976, and 5.25 percent over $23,600
$27,901-$161,550 $1,202, and 5.85 percent over $27,900
$161,551-$323,200 $9,021, and 6.25 percent over $161,550
$323,201-$2,155,350 $19,124, and 6.85 percent over $323,200
$2,155,351-$5,000,000 $144,626, and 9.65 percent over $2,155,350
$5,000,001-$25,000,000 $419,135, and 10.30 percent over $5,000,000
$25,000,001 upwards $2,479,135, and 10.90 percent over $25,000,000

3. A head of household 

IncomeState income tax amount
$0-$17,150 four percent of your income
$17,151-$23,600 $512, and 4.5 percent over $12,800
$23,601-$27,900 $730, and 5.25 percent over $17,650
$27,901-$161,550 $901, and 5.85 percent over $20,900
$161,551-$323,200 $5,976, and 6.25 percent over $107,650
$323,201-$2,155,350 $16,079, and 6.85 percent over $269,300
$2,155,351-$5,000,000 $108,359, and 9.65 percent over $1,616,450
$5,000,001-$25,000,000 $434,871, and 10.30 percent over $5,000,000
$25,000,001 upwards $2,494,871, and 10.90 percent over $25,000,000

You’ll also pay an additional local income tax if you live in New York City or Yonkers at around the three to four percent mark.  

Furthermore, corporation tax will be applied where appropriate across the state at a rate between 6.5 and 7.25 percent. 

If you dread tax season and want some guidance to ensure you’re filing your taxes correctly, a financial advisor can offer assistance. Answer a few questions, and Unbiased can connect you to a financial advisor perfectly suited to meet your needs. Get started here.

New York sales tax 

In the state of New York, sales and use tax is combined statewide at a rate of four percent.  

Sales tax applies to in-state purchases, while use tax applies to out-of-state purchases used within New York State. On top of this rate, local districts, cities, and counties will add their own tax, usually up to around eight percent. The highest local sales tax rate of 4.5 percent applies in: 

  • The Bronx  

  • Brooklyn  

  • Manhattan 

  • Staten Island 

There are several exemptions to sales tax, including prescription and non-prescription medicines, utility services, and most groceries. Alcohol is not considered an exemption and is taxed per gallon as follows: 

  • Wine is taxed at $0.30 per gallon. 

  • Beer is taxed at $0.14 per gallon. 

  • Liquor is taxed at $6.44 per gallon. 

New York property tax 

As can be the case with sales tax, property tax ranges a lot in New York State, depending on whether you live in New York City or elsewhere. Unlike sales tax, NYC residents benefit from relatively low property tax rates.  

Homes in the city are more expensive, with a $700,000 median price as of 2023. However, the average property tax rate in the Big Apple is lower, at just 0.88 percent compared to 1.69 percent statewide, with some county rates exceeding 2.50 percent.  

In the end, property prices are so comparatively high that the average homeowner in the city pays $8,980 compared to the statewide average of $5,372.  

New York estate tax 

If you’re wondering whether you can avoid estate tax or inheritance tax in New York State, the question comes down to the value of the estate in question.  

For 2023 dates of death, anything under $6.58 million is excluded from state taxation. After this figure, the taxable amounts and accordant rates are as follows (as of 2023): 

Taxable estateEstate tax amount
$1-$500,000 3.06 percent of the taxable estate
$500,000-$1,000,000 $15,300, and 5.0 percent of taxable excess
$1,000,001-$1,500,000 $40,300, and 5.5 percent of taxable excess
$1,500,001-$2,100,000 $67,800, and 6.5 percent of taxable excess
$2,100,001-$2,600,000 $106,800, and 8.0 percent of taxable excess
$2,600,001-$3,100,000 $146,800, and 8.8 percent of taxable excess
$3,100,001-$3,600,000 $190,800, and 9.6 percent of taxable excess
$3,600,001-$4,100,000 $238,800, and 10.4 percent of taxable excess
$4,100,001-$5,100,000 $290,800, and 11.2 percent of taxable excess
$5,100,001-$6,100,000 $402,800, and 12.0 percent of taxable excess
$6,100,001-$7,100,000 $522,800, and 12.8 percent of taxable excess
$7,100,001-$8,100,000 $650,800, and 13.6 percent of taxable excess
$8,100,001-$9,100,000 $786,800, and 14.4 percent of taxable excess
$9,100,001-$10,100,000 $930,800, and 15.2 percent of taxable excess
$10,100,001 upwards $1,082,800, and 16.0 percent of taxable excess

New York motor tax  

A New York State car purchase is covered by the four percent sales tax rate and the additional local sales tax rate.  

Statewide tax plus local tax could put your rate as high as 8.75 percent, depending on where in the state you choose to buy your vehicle. The lowest local tax rate applies in Pleasantville, while the highest applies in New York City.  

Consider manufacturer or dealership incentives in the tax calculations you complete for your car purchase, and don’t forget to account for extra taxation, such as the taxed price of gasoline: 

  • Gasoline is taxed at $0.1815 per gallon. 

  • Undyed diesel is taxed at $0.1635 per gallon. 

  • Aviation fuel is taxed at $0.181 per gallon. 

  • Jet fuel is taxed at $0.073 per gallon. 

New York retirement tax 

While New York’s cost of living can be high, it’s still considered a reasonably retirement-friendly state. All Social Security retirement benefits are exempt from taxation, though income from retirement accounts and private pensions is tax-deductible up to $20,000.  

There’s a lot to love about living in New York, so determining whether it’s a viable option for you from a tax standpoint is key if you decide to settle down in the state. A financial advisor can help you handle all your tax queries and ensure you’re not paying more tax than needed.  

Find your financial advisor with Unbiased. 

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.

Need help with your taxes?

A financial advisor can help you with all of your tax planning needs.