4 New York State Income Tax FAQs [ Avoid Tax Problems ]

This article will help you understand New York State income tax rates as well as how to remain compliant with the NYS tax laws.

SImilar to the federal tax system, the amount of New York State income taxes that you will pay is based upon your level of income and a sliding percentage scale. 

The higher your income, the higher your tax bracket, and as such, the more income tax you will pay.

The lower your income, the lower your income tax bracket, and as such, the less income tax you will pay.

New York Income Tax Rates

New York income taxes are among the highest in the country.  New York State has eight marginal tax brackets.

The tax rate will range from 4% to 8.82% depending upon your level of income.

Also, if you live in New York City, you’ll be required to pay even more tax, as NYC  imposes its own local income tax system on top of the State.

Your tax bracket will depend on your filing status. For example, when you review the charts, you will see that married people will have wider tax brackets than someone who is filing single. 

You will have to determine your filing status. Filing statuses include:

• Single
• Married filing jointly; or
• Head of household  

 You also need to know which form you will be using to file. The most common form is IT-201 Resident Income Tax Return. 

Should you require additional forms, you can find details on the New York State Department of Taxation  website. 

Calculating your income tax can be done on your own; with the help of a tax accountant ; or with this New York State income tax calculator depending upon the complexity of your tax matter.  

Filing Your New York  State Income Tax Return

If you   reside  in New York State, or if you are a non-resident but spend a certain amount of time in New York State, you are required to submit an income tax return if you have earned over a certain earning threshold.

The filing deadline for an individual is April 15th, unless changed by an executive order. 

However, barring future executive orders the filing deadline will be April 15th.

NYS Income Tax Self Employment Issues

Individuals that are self employed commonly have New York State income tax problems. 

The reason why is that self employed individuals do not automatically get their taxes deducted from their federal gross or New York State income. 

As such both the IRS and the New York State Department of Taxation require that self employed individuals make quarterly estimated tax payments. 

Quarterly estimated tax payments are calculated based upon your prior year’s earnings and can be adjusted accordingly during the current tax year based upon your level of income. 

Quarterly estimated tax payment should be calculated by either you or your accountant so you can budget your tax payments into your business income and expenses. 

If you underpay your New York  income tax, either through inadequate withholding or because you are self-employed and did not make the correct estimated payments, you will be charged a penalty.

New York State Department of Taxation

New York State income taxes are administered by the New York State Department of Taxation and Finance.

The New York Department of Taxation and Finance assesses and collects income tax, sales tax, as well as  other business related taxes. 

Property taxes are administered and collected by New York counties on the local level.

If you have any issues with your New York State income tax returns, you will need to address it with the New York State Department of Taxation and Finance.

Penalties & NY Tax Collection Actions

If you miss the deadline to file  your New York State income taxes, you will be subject to a failure to file penalty. 

If you fail to pay your New York State income taxes, you will be subject to failure to pay penalty.

Penalties can quickly add up if you continue to underpay your taxes.

Collection action is administered by the New York State Department of Taxation and Finance. 

Continued failure to pay can lead to stronger collection actions on the part of the New York State Department of Taxation and Finance, which can be highly  aggressive about pursuing unpaid tax liabilities.

For example, if you owe over $10,000 in unpaid taxes, New York State will suspend your driver’s license. 

If you ignore the notices to pay your New York taxes, you can be subject to such collection action including but not limited to :  tax warrants, bank levies, and wage garnishments.

Dealing with calculating and paying income tax is probably not your favorite thing to do, but something that we are required to do.

Dealing with the New York State Department of Taxation and Finance is stressful and complicated. 

There is a lot to know, and many taxpayers don’t know what their best options are.

If you have unfiled income taxes or if you owe back taxes, the Tax Problem Law Center can help get you back on track.