New York Tax Rates 2026
Income tax, property tax, and estimated take-home pay for New York residents.
Affiliate link. See our disclosure.
Income Tax in New York
New York has a moderate state income tax rate of 6.85%, roughly in line with the national average of 4.3%.
| Tax Component | Rate / Amount | On $75K Salary |
|---|---|---|
| Federal Income Tax | 10-37% (marginal) | $10,238 |
| New York State Tax | 6.85% | $5,138 |
| FICA (SS + Medicare) | 7.65% | $5,738 |
| Total Tax Burden | $21,114 | |
| Annual Take-Home | $53,886 |
Property Tax in New York
New York's effective property tax rate is 1.69%, which is above the national average of 1.07%. On the national median home value of $405,300, New York homeowners pay approximately $6,850 per year ($571/month) in property taxes.
Property tax is deductible on your federal return if you itemize, but the SALT deduction is capped at $10,000 total (combined state income tax + property tax). In New York, a $75K earner paying $11,988 in combined state/local taxes exceeds the $10,000 SALT cap.
Cost of Living Considerations
Tax rates are only one piece of the puzzle. When comparing New York to other states, also consider housing costs, healthcare expenses, grocery prices, and transportation costs. Use our calculators below to model your specific situation.
Affiliate link. See our disclosure.
Sales Tax in New York
New York has a state sales tax rate of 4.0%. Local jurisdictions may add additional sales tax on top of the state rate. On a $35,000 vehicle purchase, the state sales tax alone adds $1400. Groceries, prescription medications, and certain essentials may be exempt or taxed at a reduced rate depending on New York law. When budgeting for large purchases, always factor in the combined state and local rate in your area.
Tax Planning Tips for New York Residents
Max out pre-tax contributions. Every dollar contributed to a 401(k) or traditional IRA reduces both your federal and New York state taxable income. A $23,500 401(k) contribution saves you $1610 in state taxes alone.
Itemize strategically. If your combined state income tax and property tax exceed $10,000, you are losing deductions to the SALT cap. Consider strategies like bunching charitable deductions or using a donor-advised fund to maximize itemized deductions in alternating years.
Consider municipal bonds. Interest from New York municipal bonds is typically exempt from both federal and New York state income tax. For investors in the 6.85% bracket, this provides a meaningful after-tax yield advantage over comparable taxable bonds.
Who Benefits from Living in New York?
Middle-income families in New York face an effective state tax rate of roughly 4.8-6.85%, which is above average. Families should focus on maximizing deductions and credits available under New York law.
Remote workers should verify whether New York taxes income based on residence or employer location. This can significantly impact your net pay if your employer is in a different state.
Small business owners in New York should explore whether the state offers pass-through entity tax elections, which can help circumvent the $10,000 SALT deduction cap for federal purposes.
New York Three-Layer Tax Stack — State + NYC + Yonkers (14.776% Top) 2026
⌄Median New York household take-home math
The Three-Layer New York Tax Stack — How NYC Reaches 14.776%
New York is one of only two states (with Maryland) where local income taxes can exceed 1% on top of the state rate. An NYC resident pays three layers: New York State (4-10.9%), NYC local income tax (3.078-3.876%), plus federal. Yonkers residents face their own surcharge: 16.75% of their state tax owed. The combined state + NYC top rate of 14.776% is the highest combined sub-national income tax rate in the United States.
| Where you live in NY (single filer) | State Top | Local Add | Combined Top |
|---|---|---|---|
| Upstate NY (Buffalo, Rochester, Albany, Syracuse) | 10.9% | 0% | 10.9% |
| Long Island (Nassau, Suffolk Counties) | 10.9% | 0% | 10.9% |
| Westchester County (excluding Yonkers) | 10.9% | 0% | 10.9% |
| Yonkers resident | 10.9% | +1.825% (16.75% surcharge of state) | ~12.7% |
| NYC resident (5 boroughs) | 10.9% | +3.876% NYC local | 14.776% (highest in US) |
| NJ/CT commuter working in NYC | NY non-resident on NY-source income | $0 NYC tax (only residents pay) | Varies (NJ/CT tax + NY non-resident credit) |
NY rates per NY State Department of Taxation and Finance Pub. NYS-50-T-NYS (1/26). NYC rates per NYS Pub. NYS-50-T-NYC (1/26). Convenience rule per NY Tax Law §601(e). NY ranks last (50th) on Tax Foundation 2026 State Tax Competitiveness Index.
Save Your Tax Plan
Track your state tax math and compare with peers anonymously. Free account.
NYC vs Upstate — Same State, Two Financial Realities
New York is two states stitched together. NYC and the surrounding metro represent ~10% of US population concentrated in 0.05% of US land, with cost of living approximately 2.5-3x the Upstate cities of Buffalo, Rochester, Syracuse, and Albany. A $150K salary buys very different lifestyles depending on which side of the I-87/I-90 dividing line you choose.
| NY Metro | Median Home Price (2026) | Median Rent (2BR) | $150K Take-Home Reality |
|---|---|---|---|
| NYC (Manhattan + Brooklyn) | $890K-$1.4M | $3,800-$5,200 | Housing-stressed; 35-45% of net to rent |
| NYC outer boroughs (Queens, Bronx, Staten Island) | $640K-$820K | $2,400-$3,200 | Tight; 28-35% of net to rent |
| Long Island (Nassau, Suffolk) | $725K | $2,800-$3,500 | Comfortable but property tax-heavy ($12-18K/yr) |
| Westchester (Yonkers, White Plains) | $650K | $2,500-$3,000 | Comfortable + Yonkers surcharge if applicable |
| Albany / Capital Region | $295K | $1,400-$1,700 | Comfortable; 14-18% of net to rent |
| Buffalo / Rochester / Syracuse | $210K-$245K | $1,100-$1,400 | Affluent; 10-14% of net to rent |
NY metro home prices per Zillow Research Q1 2026. Rent data per Apartment List 2026. Cost-of-living index per BLS Northeast Regional Data 2026.
The NY Estate Tax Cliff at $7.35M — Why Wealthy New Yorkers Relocate
New York imposes a state estate tax with a "cliff" structure that catches estates at modest excesses over the $7,160,000 (2025) / $7,350,000 (2026) exemption. Unlike federal estate tax (which only taxes the amount above the exemption), NY's cliff means estates exceeding 105% of the exemption (~$7.7M) lose the exemption entirely — and face state estate tax of 3.06-16% on the FULL value. This is one of the most penalizing estate tax structures in the United States.
| NY Estate Value (2026) | NY Estate Tax | What happens at the cliff |
|---|---|---|
| Under $7,350,000 | $0 | Below exemption — no NY estate tax |
| $7,350,000 - $7,717,500 (105% of exemption) | Tax on excess only | Phase-out range |
| Above $7,717,500 (105% of exemption) | Tax on FULL estate value (the cliff) | Exemption fully lost — taxed from dollar 1 |
| $10M estate | ~$1,067,000 NY estate tax | Plus federal estate tax above $13.99M federal exemption |
| $15M estate | ~$2,090,000 NY estate tax | NY tax structure makes Florida/TX domicile attractive pre-death |
NY estate tax per NY DTF Estate Tax Form ET-706. Cliff structure per NY Tax Law §951. 2026 exemption $7,350,000 per AARP NY State Tax Guide 2026. Federal exemption $13.99M (single) per IRS Rev. Proc. 2025-32.
NY529 & PTET Workarounds — Tax Strategies Most NY Earners Miss
High-earning New Yorkers have access to two specific tax strategies that can substantially reduce state and federal liability: the NY529 deduction (up to $10,000 per couple in NY tax deduction for college contributions) and the NY PTET election (Pass-Through Entity Tax) which allows S-corp and partnership owners to deduct state taxes paid at the entity level — bypassing the federal SALT cap.
| NY Tax Strategy | Annual Savings (typical high-earner) | Eligibility |
|---|---|---|
| NY529 College Savings (NY's Direct Plan) | $1,090 NY tax saved per $10K contributed (10.9% rate) | NY residents with kids/grandkids in college path |
| NY PTET (Pass-Through Entity Tax) | $3,000-$25,000+ federal tax saved annually | S-corp/partnership owners (election by 3/15) |
| NYC UBT (Unincorporated Business Tax) credit | 23% of NYC UBT owed credited on state return | NYC self-employed/sole proprietors above $95K net |
| NY pension exclusion (age 59½+) | Up to $20K per person per year of pension excluded | NY residents 59½+ with public/private pensions |
| STAR property tax credit | $700-$2,500/yr off school taxes | NY homeowners under $500K income (Basic STAR) |
PTET per NY DTF PTET Election Information. NY529 deduction per NY Tax Law §612(c)(32). NYC UBT credit per NYC Code §11-503. STAR program per NY Real Property Tax Law §425.
Run Pro-level Tax Strategy
FinCalcs Pro models multi-year tax-bracket scenarios, deferral, and entity-level optimization.
NY Retirement Income Treatment — Why Florida Migration Persists
New York's treatment of retirement income is mixed. NY does NOT tax Social Security benefits, but DOES tax 401(k), IRA, and pension distributions — with a $20,000 per-person annual exclusion for those 59½ and older. Public pensions from NY State, NY City, and federal civilian/military are fully exempt. Private pensions and 401(k) withdrawals get the $20K exclusion but are otherwise taxable. This drives the well-documented retiree migration to Florida (no income tax) and Tennessee (no wage income tax).
| NY Retirement Income Source | NY State Tax | Notes |
|---|---|---|
| Social Security benefits | Not taxed | Same as federal exclusion approach |
| NY State / NYC public pension | Fully exempt | Including teachers, police, fire, civil service |
| Federal civilian / military pension | Fully exempt | Both federal pensions exempt from NY tax |
| Private pension (age 59½+) | First $20,000 excluded; balance taxed | Per person, not per couple — $40K total for couple |
| 401(k) / IRA distributions (age 59½+) | First $20,000 excluded; balance taxed | Same $20K exclusion applies to all retirement accounts |
| 401(k) / IRA distributions (under 59½) | Fully taxed at regular rates | No exclusion if distributed early |
NY retirement income exclusion per NY Tax Law §612(c)(3-a). Public pension exemption per NY Tax Law §612(c)(3). State migration data per IRS Statistics of Income Migration Data 2023.
Full Financial Picture
See how state tax interacts with your full financial plan in one 10-minute interactive checkup.
Run Your New York Numbers
Calculate your exact take-home pay, compare cities within New York, or evaluate neighboring states.
Frequently Asked Questions About New York Taxes
What is the New York state income tax rate for 2026?
How much will I take home on $100K in New York City?
Do I pay NYC tax if I commute from New Jersey or Connecticut?
What is the Yonkers surcharge?
Does New York tax retirement income?
What is the New York estate tax cliff?
What is the NY PTET election and should I use it?
Why does New York rank last on the Tax Foundation State Tax Index?
Plan your New York financial picture
FinCalcs helps you save your numbers, get personalized projections, and stay on track. Pick the option that fits your stage:
File your state taxes online quickly and accurately. Easy step-by-step process with guaranteed accuracy.
E-file Your State Return →Affiliate link. See our disclosure.