New York has both state income tax and local income tax in some areas
New York State charges income tax on wages, self-employment income, investment gains, and other earnings. The state tax rate ranges from 4% to 10.9% depending on your income level — higher earners pay a higher percentage. You owe state tax if you live in New York, work in New York, or receive income from New York sources, even if you live elsewhere.
On top of state tax, New York City and a handful of other municipalities charge their own local income tax. New York City's rate is between 3.6% and 3.876% of your income. This means someone earning $100,000 in New York City could owe both state and city tax on that income.
The state also taxes capital gains, retirement distributions, and certain business income. Property tax, sales tax, and estate tax are separate from income tax and follow their own rules.
Key Takeaways
- New York State income tax rates range from 4% to 10.9% based on your income bracket, with higher earners paying the top rate.
- New York City residents and workers owe an additional local income tax of 3.6% to 3.876% on top of state tax.
- You owe New York State tax if you live in the state, work there, or earn income from New York sources.
- Tax brackets and rates change yearly, so your actual tax bill depends on your total income and filing status.
New York State income tax brackets for 2024
New York uses a progressive tax system, meaning your income is taxed at different rates depending on which bracket it falls into. The brackets differ based on whether you file as single, married filing jointly, head of household, or married filing separately.
For single filers in 2024, the brackets start at 4% on income up to $11,200, then jump to 4.5% up to $45,400, then 5.85% up to $110,000, and continue climbing to 10.9% on income over $680,000. Married couples filing jointly have higher income thresholds before moving to the next bracket — for example, the 4% bracket extends to $22,400 instead of $11,200.
These brackets are adjusted each year for inflation, so the dollar amounts change annually. The New York Department of Taxation and Finance publishes updated brackets in January of each year.
Who does not owe New York State income tax
You do not owe New York State income tax if you are a nonresident with no New York source income. A nonresident is someone who did not live in New York during the tax year and did not work there. If you moved out of state partway through the year, you owe tax only on income earned while you were a resident or on income from New York sources.
Certain types of income are exempt from New York State tax. These include federal government employee pensions, military pensions, and some retirement distributions if you meet specific age and income requirements. Social Security benefits are not taxed by New York State. However, most W-2 wages, self-employment income, and investment income are taxable.
If your income is very low, you may not owe tax even as a resident. New York has a standard deduction — the amount of income you can earn tax-free. For 2024, the standard deduction is $8,000 for single filers and $16,000 for married couples filing jointly. If your income is below your standard deduction, you owe no state income tax.
New York City income tax on top of state tax
New York City residents and people who work in the city owe local income tax in addition to state tax. The city tax rate is 3.6% to 3.876% depending on your income level. This is separate from and added to your state tax bill.
The city has its own tax brackets. For 2024, single filers pay 3.6% on income up to $21,600, then 3.876% on income above that. Married couples filing jointly have higher thresholds. Like state brackets, city brackets adjust yearly.
If you work in New York City but live outside the city, you still owe the city tax on income earned within city limits. If you live in the city but work elsewhere, you owe city tax on all income. The city tax is withheld from paychecks if your employer is in the city, or you pay it when you file your return.
Other New York municipalities with local income tax
Beyond New York City, a small number of other municipalities charge local income tax. Yonkers, the second-largest city in the state, charges a local income tax of 1.25% to 1.5625%. Several smaller cities including Mount Vernon, Ossining, and Sheridan also have local income tax, each with their own rates.
If you live or work in one of these municipalities, you owe their local tax in addition to state tax. The rates and brackets vary by location. Your employer may withhold this tax from your paycheck, or you may need to pay it when you file your return. Check with your city or village to confirm whether your location charges local income tax and at what rate.
How to file New York State income tax
You file New York State income tax using Form IT-201 (resident return) or Form IT-203 (nonresident return). These forms are filed with the New York Department of Taxation and Finance, either by mail or electronically through the department's website or approved tax software.
If you also owe New York City tax, you file Form NYC-210 along with your state return. The city and state returns are filed together; you do not file them separately. If you use tax software, it typically handles both state and city returns in one process.
The federal tax filing important date — April 15 — is also the important date for New York State and City returns. If you file federal taxes, you should file state and local returns at the same time. Extensions are available if you need more time, but taxes owed are still due by April 15 even if you file an extension.
Deductions and credits that reduce New York State tax
New York allows a standard deduction that reduces your taxable income. You can also itemize deductions if they exceed your standard deduction. Common deductions include mortgage interest, property taxes, charitable donations, and medical expenses above a certain threshold.
New York also offers tax credits that directly reduce the tax you owe. The Earned Income Tax Credit (EITC) is available to lower-income workers. The Child and Dependent Care Credit helps families who pay for childcare. The Property Tax Relief Credit is available to homeowners and renters with lower incomes. These credits can reduce your tax bill to zero or even result in a refund.
Self-employed people can deduct business expenses and claim the self-employment tax deduction. If you have investment losses, you can deduct up to $3,000 per year against other income. Keeping records of deductible expenses throughout the year makes filing easier and can lower your tax bill significantly.
Frequently Asked Questions
Do I owe New York State tax if I moved out of state during the year?
You owe New York State tax only on income earned while you were a resident of the state. If you moved out on June 30, you owe tax on income from January through June but not on income from July onward. You file as a nonresident for the year and report only the income earned while you lived in New York.
What is the difference between New York State tax and New York City tax?
New York State tax is charged by the state government and applies to all residents and people earning income in the state. New York City tax is charged by the city and applies only to people who live or work in New York City. Both are income taxes but are separate bills. A New York City resident owes both.
Can I deduct federal taxes from my New York State income tax?
No. New York does not allow you to deduct federal income tax paid. You calculate your New York tax based on your income after taking the standard deduction or itemized deductions, but federal tax is not deductible. This is true for most states.
What happens if I do not file a New York State tax return?
If you owe tax and do not file, the state can assess penalties and interest on the unpaid amount. The state can also file a return on your behalf based on income it knows about from employers or financial institutions. If you are owed a refund but do not file, you lose the refund after a certain period. Filing even if you owe money is better than not filing.
Are retirement distributions taxed by New York State?
Most retirement distributions are taxable by New York State. However, distributions from certain pensions — including federal employee pensions and military pensions — are exempt. Distributions from IRAs and 401(k)s are generally taxable. Some retirees over age 59½ may may have access to for a retirement income exclusion, but this has income limits and specific requirements.