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- New York state has a progressive income tax.
- There are nine tax brackets ranging from 4% to 10.9%.
- The highest tax rate applies to incomes greater than $25 million.
New York taxes personal income progressively, much like the federal government. However, a provision called tax-benefit recapture means that many high earners have to take extra steps to calculate their state tax liability. Here's how it works.
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How does New York tax income?
Like California and most other states that tax personal income, New York uses a progressive tax system. As a person earns more and progresses through tax brackets, their tax rate increases for each portion of income.
New Yorkers are subject to nine tax rates: 4%, 4.5%, 5.25%, 5.5%, 6%, 6.85%, 9.65%, 10.3%, and 10.9%. Each correlates with a bracket of income, with the highest rate applying to taxable incomes greater than $25 million.
"In general, New York's state income tax system can be considered relatively high compared to some other states, which is partly due to the state's high cost of living and extensive public services," says Zaher Dehni, an enrolled agent and owner of New-York based tax firm Taxfully.
Personal income taxes are New York's largest revenue source, according to statistics published by the state's Department of Taxation and Finance. It collected more than $67 billion in personal income taxes 2021.
However, New York also has a provision called tax-benefit recapture, which essentially turns its progressive tax into a flat tax for high earners, says Eric Bronnenkant, head of tax at Betterment and a certified public accountant.
Who pays New York income taxes?
New York residents are taxed on all income they earn inside and outside of the state. Even if your domicile — the location of your permanent and primary home — is not in New York, you may still be subject to New York taxation if you are considered a resident.
Nonresidents and part-year residents may have a New York income tax liability depending on their living situation and how much they earn.
New York's millionaires represent about 0.8% of all taxpayers but paid nearly half (48.5%) of all personal income tax in 2021, according to the Department of Taxation and Finance.
To reduce their taxable income, New Yorkers can claim either a standard deduction or itemize their deductions, such as medical and dental expenses and gifts to charity.
Here are the 2022 standard deduction amounts. (2023 figures have yet to be released, but will likely be higher due to inflation):
|
Filing status |
Standard deduction |
|
Single (can be claimed as a dependent) |
$3,100 |
|
Single (cannot be claimed as a dependent) Married, filing separately |
$8,000 |
|
Married, filing jointly Qualifying surviving spouse |
$16,050 |
|
Head of household |
$11,200 |
New York income tax rates
If your New York adjusted gross income was less than $107,650, the tables below would be used to calculate your state tax liability for 2022.
For example, someone with taxable income of $80,000 paid a 4% tax on the first $8,500, a 4.5% tax on the next $3,199, a 5.25% tax on the next $2,199, and a 5.5% tax on the final $66,099, resulting in a tax bill of about $4,234.
People with incomes above $107,650 need to use special worksheets to calculate their tax due to New York's tax-benefit recapture rules.
Here are the 2022 tax brackets for each filing status. (2023 figures have yet to be released, but will likely be adjusted higher due to inflation):
Single or married, filing separately:
|
Tax rate |
Applies to taxable income between: |
|
4% |
$0 and $8,500 |
|
4.5% |
$8,501 and $11,700 |
|
5.25% |
$11,701 and $13,900 |
|
5.5% |
$13,901 and $80,650 |
|
6% |
$80,651 and $215,400 |
|
6.85% |
$215,401 and $1,077,550 |
|
9.65% |
$1,077,551 and $5,000,000 |
|
10.3% |
$5,000,001 and $25,000,000 |
|
10.9% |
$25,000,001 and up |
For married, filing jointly or qualifying widow(er):
|
Tax rate |
Applies to taxable income between: |
|
4% |
$0 and $17,150 |
|
4.5% |
$17,151 and $23,600 |
|
5.25% |
$23,601 and $27,900 |
|
5.5% |
$27,901 and $161,550 |
|
6% |
$161,551 and $323,200 |
|
6.85% |
$323,201 and $2,155,350 |
|
9.65% |
$2,155,351 and $5,000,000 |
|
10.3% |
$5,000,001 and $25,000,000 |
|
10.9% |
$25,000,001 and up |
For head of household:
|
Tax rate |
Applies to taxable income between: |
|---|---|
|
4% |
$0 and $12,800 |
|
4.5% |
$12,801 and $17,650 |
|
5.25% |
$17,651 and $20,900 |
|
5.5% |
$20,901 and $107,650 |
|
6% |
$107,651 and $269,300 |
|
6.85% |
$269,301 and $1,616,450 |
|
9.65% |
$1,616,451 and $5,000,000 |
|
10.3% |
$5,000,001 and $25,000,000 |
|
10.9% |
$25,000,001 and up |
New York corporate tax rates
New York has one of the worst business tax climates in the US, according to an analysis by the Tax Foundation, which evaluated each state's individual and corporate tax rates, property taxes, sales taxes, and unemployment insurance taxes.
Businesses based in New York have to pay a corporate franchise tax of either 6.5% or 7.25%, depending on income and the calculation method it uses. New York also imposes a fixed dollar minimum tax for general business taxpayers ranging from $25 to $200,000.
However, Dehni says, "New York offers various tax credits and incentives to encourage business development, such as the Excelsior Jobs Program Tax Credit and the New York State Film Production Credit."
New York state tax rates FAQs
What is the New York state income tax rate for 2023?
New York has a progressive income tax system, like the federal government, with income being taxed from 4% to 10.9%.
What are the New York state tax brackets for 2023?
There are nine income tax brackets in New York: 4%, 4.5%, 5.25%, 5.5%, 6%, 6.85%, 9.65%, 10.3%, and 10.9%. Each one corresponds to a bracket of income, which varies depending on filing status. The highest tax bracket only applies to incomes greater than $25 million.
When are New York state taxes due?
State income taxes in New York are due the same day as federal income taxes, which is April 15, 2024.