New York State Taxes: Income, Sales, and Property Tax

New York funds its public services through various taxes on individuals and businesses. The state’s tax code is complex, and a person’s tax obligation is primarily determined by their residency status, which dictates what income must be reported to the state.

Determining Your New York Tax Residency

A person’s tax obligation in New York is tied to their residency status: full-year resident, nonresident, or part-year resident. Full-year residency applies to individuals whose permanent home, or domicile, is in New York. An individual can only have one domicile, and if it is in New York, they are taxed as a resident regardless of time spent elsewhere.

An individual can also be treated as a full-year statutory resident, even if domiciled elsewhere, by meeting two conditions. The first is maintaining a permanent place of abode in New York for substantially all of the year. A permanent place of abode is a dwelling place, like a second home, that is maintained by the individual.

The second condition is spending more than 183 days of the year in the state, with any part of a day counting as a full day. This rule often affects individuals who split time between a New York home and one in another state. If they maintain the New York home and spend more than 183 days in the state, they are taxed on their worldwide income.

A nonresident is someone who was not a resident at any point during the year. Their New York tax obligation is limited to income from New York sources, such as wages from a job in the state.

A part-year resident is anyone who moves into or out of New York during the tax year. They are taxed as a resident on all income earned while living in the state. For the time they lived outside New York, they are taxed as a nonresident on income from New York sources.

New York State Income Tax

New York State has a progressive personal income tax, meaning tax rates increase as income rises. For the most recent tax year, rates range from 4% to 10.9%. For example, a single filer with taxable income of $50,000 would fall into a different bracket and pay a lower marginal rate than a single filer with an income of $500,000.

Taxpayers can reduce their New York adjusted gross income (AGI) by taking either a standard deduction or by itemizing deductions. The standard deduction is a fixed amount based on filing status, such as $8,000 for a single individual or $16,050 for married couples filing jointly in a recent tax year. Most taxpayers choose the standard deduction for its simplicity.

A taxpayer may choose to itemize if their total eligible expenses exceed their standard deduction. Common itemized deductions include certain medical expenses, home mortgage interest, charitable contributions, and state and local property taxes paid. This option requires detailed record-keeping of expenses.

Some localities impose their own income taxes on top of the state tax. New York City residents are subject to the NYC personal income tax. Similarly, individuals living or working in Yonkers are subject to a resident income tax surcharge or a nonresident earnings tax.

Key New York State Tax Credits and Deductions

New York offers tax credits that provide a dollar-for-dollar reduction of tax owed, which is different from a deduction that only lowers taxable income. These provisions are designed to provide financial relief for specific expenses. Many of New York’s credits are refundable, meaning a taxpayer can receive the full amount even if they owe no tax.

The Empire State Child Credit is for residents with a qualifying child. The refundable credit is the greater of $100 per child or 33% of the federal Child Tax Credit, subject to income limits.

The New York State Child and Dependent Care Credit helps offset the cost of care for a qualifying child under 13, a disabled spouse, or a dependent, which enables the taxpayer to work. This credit is a percentage of the federal credit for child and dependent care expenses and is refundable for full-year residents.

The New York State College Tuition Credit is available to full-year residents paying undergraduate tuition at a State University of New York (SUNY) or City University of New York (CUNY) institution. This refundable credit can be worth up to $400 per student and is subject to income limitations.

Sales and Use Taxes in New York

New York has a statewide sales tax of 4% on the retail sale of many goods and services. This tax is collected by vendors and applies to items like furniture, electronics, and motor vehicles. Taxable services include things like information services, protective and detective services, and interior decorating.

The total sales tax rate is often higher than 4% because most counties and cities add their own local sales taxes. For example, the combined rate in New York City is 8.875%, which includes state, city, and transportation district taxes. A rural county might have a combined rate closer to 8%.

New York law exempts certain items from sales tax. These include most food for home consumption, prescription drugs, and some medical equipment. Clothing and footwear sold for less than $110 per item are also exempt from the 4% state tax, though local sales tax may still apply.

A use tax applies to taxable items purchased outside the state, such as online, and then brought into New York for use. If the location of purchase had a lower sales tax rate than New York’s, the purchaser must pay the difference to New York. The use tax rate is the same as the sales tax rate where the item is used.

Property Taxes in New York

Property taxes in New York are a local tax, not a state tax, and are the primary funding source for public schools and municipal governments. These taxes are based on the value of real property, including land and buildings, and are administered at the local level.

The process begins when a local assessor determines each property’s market value, which property owners have the right to challenge. Local taxing jurisdictions, like school districts and counties, then set tax rates based on their annual budget needs. The tax rate is applied to the assessed value to determine the tax due.

School Tax Relief (STAR) Program

To help with property taxes, New York offers the School Tax Relief (STAR) program. Basic STAR is for owner-occupied primary residences where the owners’ combined income is $500,000 or less. Enhanced STAR provides a larger benefit for seniors aged 65 or older, with an income limit of $107,300 for the 2025-2026 school year.

The STAR benefit is now delivered as a credit for most homeowners. New applicants and those who purchased their homes after 2015 must register with the state to receive the benefit as a check or direct deposit. The STAR exemption, which was a direct reduction on a school tax bill, is no longer available to new homeowners.

Filing and Paying Your New York State Taxes

Individuals must file a New York State income tax return if they meet certain income and residency requirements. Full-year residents use Form IT-201 if their income exceeds set thresholds, such as $4,000 for most filers. Nonresidents and part-year residents use Form IT-203.

The filing deadline for New York State is the same as the federal deadline, April 15th. A six-month filing extension can be requested with Form IT-370. However, an extension to file is not an extension to pay, and any tax owed is still due by the original deadline to avoid penalties.

Returns can be filed electronically or by mail, though e-filing is the fastest and most secure method. Many people use tax software or a professional to e-file. After filing, the state will send a confirmation that the return was received.

If tax is owed, payment can be made online via the Department of Taxation and Finance website or by mailing a check with a payment voucher. For those due a refund, choosing direct deposit during filing is the fastest way to receive it.