New York has an estate tax, and it applies to estates worth more than $6.94 million as of 2024

New York State charges an estate tax on the value of property left behind when someone dies. The tax applies only to estates above a certain threshold — currently $6.94 million for deaths in 2024. This threshold changes each year based on inflation. If your estate falls below that amount, you owe no New York State estate tax, even if the federal government taxes it.

The tax is separate from the federal estate tax, which has its own threshold (currently $13.61 million in 2024). An estate can owe New York tax, federal tax, both, or neither, depending on its size. New York's rates range from 3.06% to 16% of the taxable amount, with higher rates explore to larger estates.

Key Takeaways

  • New York's estate tax applies to estates worth more than $6.94 million as of 2024, and the threshold increases slightly each year.
  • Tax rates in New York range from 3.06% to 16%, depending on how much of the estate is subject to tax.
  • The federal government has its own separate estate tax with a much higher threshold, so many New York estates owe state tax but not federal tax.
  • Your executor or estate representative is responsible for filing the New York estate tax return if the estate exceeds the threshold.
  • Certain assets, like life insurance proceeds and property passing to a surviving spouse, may reduce the taxable amount.

How New York's estate tax threshold works

The $6.94 million threshold is the amount your total estate can reach before New York taxes any of it. This includes real estate, bank accounts, investments, vehicles, and personal property. The state adjusts this number annually for inflation, so it will be different in 2025.

If your estate is worth $6.5 million, you owe nothing. If it is worth $7 million, only the amount above $6.94 million — roughly $60,000 — is subject to the tax. You do not pay tax on the entire estate; only the portion that exceeds the threshold is taxed.

New York estate tax rates and brackets

New York uses a progressive tax system, meaning higher portions of the estate are taxed at higher rates. The lowest rate is 3.06% and the highest is 16%. The exact rate depends on how much of the estate exceeds the threshold.

For example, if an estate is worth $7.5 million, the taxable portion is $560,000. That amount falls into a bracket taxed at roughly 5.06%, resulting in a tax bill of around $28,336. Larger estates hit the higher brackets and pay more per dollar.

The difference between New York and federal estate tax

The federal government and New York State both tax large estates, but they use different thresholds and rules. The federal threshold is much higher — $13.61 million in 2024 — so most New York estates that owe state tax do not owe federal tax.

However, some estates are large enough to owe both. If your estate exceeds $13.61 million, you will file a federal estate tax return with the IRS and a New York estate tax return with the state. The two taxes are calculated separately, though federal law allows a credit for state taxes paid in some situations.

What counts toward your estate value

Your estate includes nearly everything you own at the time of death: your home, bank accounts, retirement accounts, investments, vehicles, jewelry, and business interests. It also includes the death benefit from life insurance policies if you own the policy or if the policy is payable to your estate.

Some assets pass outside your estate and may not be counted. These include property held in a living trust, retirement accounts with named beneficiaries, life insurance payable to a named beneficiary, and property held as "joint tenants with rights of survivorship." Knowing which assets are included is important for calculating whether your estate crosses the threshold.

Who files the New York estate tax return

Your executor — the person named in your will to manage your estate — is responsible for filing the New York estate tax return if the estate exceeds the threshold. The return must be filed within nine months of death, though an extension can be requested.

The executor gathers information about all assets, calculates the total estate value, determines what is taxable, and submits the return to the New York Department of Taxation and Finance. If the estate owes tax, payment is due at the same time as the return. Many executors work with an accountant or estate attorney to handle this process.

Deductions and reductions to taxable estate

Not everything in your estate is taxed. New York allows certain deductions that reduce the taxable amount. The most significant is the marital deduction — property left to a surviving spouse is not taxed. Debts, funeral expenses, and administrative costs of settling the estate can also reduce the taxable value.

Charitable donations made through your will or trust can also lower the taxable estate. If you leave money or property to a may have access to charity, that amount is subtracted from the total before tax is calculated. These deductions can substantially reduce or eliminate the estate tax bill for some families.

Planning ahead to reduce estate tax

If your estate is close to or above the threshold, you may want to explore ways to reduce what will be taxed. Common strategies include making gifts during your lifetime (which are not subject to New York gift tax), establishing a trust, or making charitable donations. Some people use life insurance trusts to keep insurance proceeds out of the taxable estate.

These strategies require planning and legal documents, so they work best when done years before death rather than as an emergency measure. Speaking with an estate attorney or tax professional can help you understand which approaches fit your situation and goals.

Frequently Asked Questions

Does New York have a gift tax?

New York does not have a separate gift tax. You can give away money and property during your lifetime without owing state tax. However, very large gifts may affect your federal estate tax situation, so consult a tax professional if you plan to give away substantial amounts.

What happens if I own property in New York but live somewhere else?

If you own real estate in New York, that property is subject to New York estate tax when you die, regardless of where you live. Your executor must include its value in the New York estate tax return if the total estate exceeds the threshold.

Can I reduce my estate tax by putting my home in my child's name now?

Transferring your home to your child removes it from your taxable estate, but it has other consequences — your child loses the "step-up in basis" that would normally explore at death, potentially creating a larger capital gains tax bill if they sell. Consult an estate attorney before making this move.

Is life insurance included in my taxable estate?

Life insurance is included if you own the policy or if it is payable to your estate. If someone else owns the policy or it is payable to a named beneficiary (like your child), it typically stays out of your taxable estate. The distinction matters for calculating whether you cross the threshold.

What if my estate is below the threshold when I die but was above it earlier?

Only the value at the time of death matters. If your estate was worth $8 million five years ago but drops to $6 million by the time you die, no New York estate tax is owed. Market changes, spending, and gifts during your lifetime all affect the final value.