New York charges both state income tax and local income tax in some cities

Yes, New York has a state income tax. If you earn money and live in New York, you owe state tax on that income. The state tax rate ranges from 4% to 10.9% depending on how much you earn — higher earners pay a higher percentage. New York City residents also pay a separate city income tax on top of the state tax, which ranges from 3.876% to 4.5%.

The state tax applies to wages, self-employment income, investment gains, and other earnings. You file a New York State tax return if you lived in the state for any part of the tax year and earned above a certain threshold. That threshold changes each year and depends on your filing status — whether you file as single, married filing jointly, head of household, or another category.

Some other New York cities and counties also charge local income tax on top of state tax. Yonkers, for example, has its own city tax. If you live outside New York City but in a city or county with a local tax, you will owe that as well. The total tax burden varies significantly depending on where in New York you live and how much you earn.

Key Takeaways

  • New York State income tax ranges from 4% to 10.9% based on your income level, and you owe it on wages, self-employment income, and investment gains.
  • New York City residents pay an additional city income tax of 3.876% to 4.5% on top of state tax.
  • Other New York cities and counties, including Yonkers, charge their own local income taxes that stack on top of state tax.
  • You must file a New York State tax return if you lived in the state for any part of the year and earned above the annual threshold for your filing status.

New York State tax brackets and rates for 2024

New York uses a progressive tax system, meaning the tax rate increases as your income increases. You do not pay the top rate on all your income — only on the portion that falls within each bracket. For example, a single filer in 2024 pays 4% on income up to $11,200, then 4.5% on income between $11,200 and $45,700, and so on up to 10.9% on income over $697,900.

The brackets adjust slightly each year for inflation. The exact numbers for your filing status — single, married filing jointly, head of household, or married filing separately — are published by the New York Department of Taxation and Finance. You can find the current brackets on their website before you file. If your income crosses multiple brackets, you calculate tax on each portion separately and add them together.

New York also offers a property tax credit and an earned income credit for lower-income residents. These credits reduce the amount of tax you owe after calculating your base tax. If you are self-employed, you also owe New York State self-employment tax in addition to income tax.

New York City income tax on top of state tax

If you live in New York City, you pay city income tax in addition to state income tax. The city tax rate ranges from 3.876% to 4.5% depending on your income. Like the state tax, it is progressive — higher earners pay a higher rate. The city brackets are different from the state brackets, so you calculate city tax separately.

The city tax applies to the same types of income as the state tax: wages, self-employment income, investment gains, and other earnings. You file a New York City tax return (Form NYC-1) along with your state return if you owed city tax for the year. The city return is due on the same date as your federal return — typically April 15.

Some people who work in New York City but live outside the city also owe city tax. If you worked in the city for any part of the year, you may be subject to city tax even if you did not live there. The rules depend on your residency status and where you earned the income.

Who must file a New York State tax return

You must file a New York State tax return if you lived in New York for any part of the tax year and your income exceeded the filing threshold for your status. The threshold varies by filing status and age. For 2024, a single person under 65 must file if they earned more than $14,600. A married couple filing jointly must file if their combined income exceeded $29,200. These thresholds increase slightly each year.

Even if your income is below the threshold, you may want to file anyway. If your employer withheld state tax from your paychecks, filing a return may result in a refund. If you are self-employed, you almost certainly need to file to pay your self-employment tax obligation. If you received certain credits or deductions, filing can lower your tax bill.

You file your New York State return using Form IT-201 (resident return) or Form IT-203 (nonresident return) depending on whether you were a resident for the entire year. The return is due on April 15 unless you request an extension. You can file on paper or electronically through the state's approved e-file system.

Self-employment tax and business income in New York

If you are self-employed or own a business in New York, you owe state income tax on your net business income. You also owe New York State self-employment tax, which is separate from federal self-employment tax. The state self-employment tax rate is 3.5% on net self-employment income above $20,800 for 2024.

You report self-employment income on Schedule C (federal) and Schedule C-EZ or Schedule C (New York) depending on the complexity of your business. You then calculate your state income tax on the net income from your business plus any other income you earned. Self-employed people often owe estimated tax payments throughout the year rather than waiting until April 15.

If you operate a business as an LLC, S-corp, or partnership, the tax treatment depends on your entity type and how you elected to be taxed. Some business structures allow you to pass income through to your personal return, while others require separate business tax filings. A tax professional can help you understand your obligations based on your specific situation.

Deductions and credits that reduce New York State tax

New York allows you to deduct certain expenses from your income before calculating tax. The most common deduction is the standard deduction, which is a set amount based on your filing status. For 2024, the standard deduction for a single filer is $8,000, and for married filing jointly it is $16,000. You can claim the standard deduction or itemize deductions if itemizing results in a larger deduction.

New York also offers several credits that directly reduce your tax bill. The Earned Income Credit (EIC) helps lower-income workers. The Property Tax Credit helps homeowners and renters with property tax or rent burdens. The Child and Dependent Care Credit covers some childcare expenses. These credits are worth more than deductions because they reduce your tax dollar-for-dollar rather than reducing your taxable income.

If you paid tuition for higher education, you may be able to claim the Tuition information Program (TAP) credit or the Education Credit. If you made charitable donations, paid mortgage interest, or had other may have access to expenses, you may deduct them if you itemize. Review the New York Department of Taxation and Finance website or speak with a tax professional to see which deductions and credits explore to your situation.

How to file your New York State tax return

You can file your New York State tax return on paper by mail or electronically through an approved e-file provider. Most people file electronically because it is faster and the state processes refunds more quickly. You can e-file through tax software, a tax professional, or the state's free e-file system if you meet income requirements.

To file, you need your Social Security number, your W-2 forms from employers, your 1099 forms for other income, and documentation of any deductions or credits you are claiming. You also need your federal tax return information because New York tax is based on federal taxable income. If you are filing jointly, both spouses must sign the return.

The return is due April 15 unless you request an extension. If you file late without an extension, you will owe a penalty and interest on any unpaid tax. If you expect a refund, filing early can get your money back faster. If you owe tax, you can pay online, by mail, or through an installment plan if you cannot pay in full by the important date.

Frequently Asked Questions

Do I owe New York State tax if I moved out of the state mid-year?

Yes, you owe New York State tax on income you earned while you lived in the state. You file as a nonresident for the year you moved and report only the income earned during the months you lived in New York. You may also owe tax to the state you moved to on income earned after you left. File returns in both states and claim a credit for taxes paid to avoid double taxation.

What happens if I do not file a New York State tax return?

If you owe tax and do not file, the state will assess a failure-to-file penalty of 5% per month (up to 25%) plus interest on the unpaid tax. If you are owed a refund, you have three years to claim it before the money goes to the state. Filing late is better than not filing at all because it stops the penalty from growing.

Can I deduct federal taxes paid from my New York State tax?

No, New York does not allow you to deduct federal income tax paid. However, you can deduct state and local taxes (SALT) on your federal return up to $10,000 per year. New York State tax is one of the largest SALT deductions for New York residents.

Is there a New York State tax on retirement income or Social Security?

Social Security benefits are not taxed by New York State. Retirement income from pensions, 401(k) withdrawals, and IRAs is taxed as regular income. However, New York offers an exemption for military pensions and certain other government pensions. If you are retired, you may still owe state tax on non-exempt retirement income.

What is the difference between state tax and city tax in New York?

State tax is collected by New York State and funds state programs. City tax is collected by New York City and funds city programs. If you live in New York City, you pay both. If you live elsewhere in New York, you pay only state tax (unless your city or county has a local tax). The rates and brackets are different for each.