Understanding New York State income tax regulations can be a complex task for both employers and individuals. Understanding your tax obligations and responsibilities is crucial to ensure compliance and avoid potential penalties. In this blog post, we’ll explore key aspects of New York State income tax relevant to employers and individuals, providing clarity and guidance.
Overview of New York State Income Tax
New York State imposes income tax on residents, nonresidents, and part-year residents based on their income earned within the state. The tax rates are progressive, meaning they increase with income levels. Here’s an overview of the filing statuses:
- Single: For unmarried individuals.
- Married Filing Jointly: For married couples filing together.
- Married Filing Separately: For married individuals who choose to file separately.
- Head of Household: For unmarried individuals who support dependents.
Tax Rates and Brackets for 2023 New York State Income Tax (For filing Year 2024)
Calculating your New York State income tax for 2023 requires familiarity with the tax rates and brackets applicable to your filing status and income level. Here’s a detailed breakdown of how these rates and brackets apply for the tax year 2023 under New York State income tax law.
For individuals whose New York State adjusted gross income (AGI) is $107,650 or less, and whose taxable income is $65,000 or more, specific tax rates and brackets are used based on your filing status:
Married Filing Jointly and Qualifying Surviving Spouse
| If your taxable income (line 38) is over | But not over | Your tax is |
| $0 | $17,150 | 4% of line 38 |
| $17,150 | $23,600 | $686 plus 4.5% of the excess over $17,150 |
| $23,600 | $27,900 | $976 plus 5.25% of the excess over $23,600 |
| $27,900 | $161,550 | $1,202 plus 5.5% of the excess over $27,900 |
| $161,550 | $323,200 | $8,553 plus 6% of the excess over $161,550 |
| $323,200 | $2,155,350 | $18,252 plus 6.85% of the excess over $323,200 |
| $2,155,350 | $5,000,000 | $143,754 plus 9.65% of the excess over $2,155,350 |
| $5,000,000 | $25,000,000 | $418,263 plus 10.3% of the excess over $5,000,000 |
| $25,000,000 | $2,478,263 plus 10.9% of the excess over $25,000,000 |
Single and Married Filing Separately
| If your taxable income (line 38) is over | But not over | Your tax is |
| $0 | $8,500 | 4% of line 38 |
| $8,500 | $11,700 | $340 plus 4.5% of the excess over $8,500 |
| $11,700 | $13,900 | $484 plus 5.25% of the excess over $11,700 |
| $13,900 | $80,650 | $600 plus 5.5% of the excess over $13,900 |
| $80,650 | $215,400 | $4,271 plus 6% of the excess over $80,650 |
| $215,400 | $1,077,550 | $12,356 plus 6.85% of the excess over $215,400 |
| $1,077,550 | $5,000,000 | $71,413 plus 9.65% of the excess over $1,077,550 |
| $5,000,000 | $25,000,000 | $449,929 plus 10.3% of the excess over $5,000,000 |
| $25,000,000 | $2,509,929 plus 10.9% of the excess over $25,000,000 |
Head of Household
| If your taxable income (line 38) is over | But not over | Your tax is |
| $0 | $12,800 | 4% of line 38 |
| $12,800 | $17,650 | $512 plus 4.5% of the excess over $12,800 |
| $17,650 | $20,900 | $730 plus 5.25% of the excess over $17,650 |
| $20,900 | $107,650 | $901 plus 5.5% of the excess over $20,900 |
| $107,650 | $269,300 | $5,672 plus 6% of the excess over $107,650 |
| $269,300 | $1,616,450 | $15,371 plus 6.85% of the excess over $269,300 |
| $1,616,450 | $5,000,000 | $107,651 plus 9.65% of the excess over $1,616,450 |
| $5,000,000 | $25,000,000 | $434,163 plus 10.3% of the excess over $5,000,000 |
| $25,000,000 | $2,494,163 plus 10.9% of the excess over $25,000,000 |
Additional Notes
> NYS Adjusted Gross Income $107,650 or Less and NYS Taxable Income Less Than $65,000:
Refer to the NYS tax table provided by the New York State Department of Taxation and Finance for your tax calculation.
> NYS Adjusted Gross Income More Than $107,650:
For taxpayers whose New York adjusted gross income exceeds $107,650, utilize the NYS tax computation method to accurately calculate your New York State tax.
New York City Tax Rate Schedule for 2023(For filing Year 2024)
To calculate your 2023 New York City tax, which you will file in 2024, refer to the NYC tax rate schedule provided below if your NYC taxable income is $65,000 or more.
Married Filing Jointly and Qualifying Surviving Spouse
| If line 47 is: | The tax is: |
| Over $0 but not over $21,600 | 3.078% of line 47 |
| Over $21,600 but not over $45,000 | $665 plus 3.762% of the excess over $21,600 |
| Over $45,000 but not over $90,000 | $1,545 plus 3.819% of the excess over $45,000 |
| Over $90,000 | $3,264 plus 3.876% of the excess over $90,000 |
Single and Married Filing Separately
| If line 47 is: | The tax is: |
| Over $0 but not over $12,000 | 3.078% of line 47 |
| Over $12,000 but not over $25,000 | $369 plus 3.762% of the excess over $12,000 |
| Over $25,000 but not over $50,000 | $858 plus 3.819% of the excess over $25,000 |
| Over $50,000 | $1,813 plus 3.876% of the excess over $50,000 |
Head of Household
| If line 47 is: | The tax is: |
| Over $0 but not over $14,400 | 3.078% of line 47 |
| Over $14,400 but not over $30,000 | $443 plus 3.762% of the excess over $14,400 |
| Over $30,000 but not over $60,000 | $1,030 plus 3.819% of the excess over $30,000 |
| Over $60,000 | $2,176 plus 3.876% of the excess over $60,000 |
Additional notes
To compute your 2023 New York City tax, which will be filed in the tax year 2024, use the NYC tax table if your NYC taxable income is less than $65,000.
Employer Responsibilities
Employers in New York State have specific responsibilities related to income tax withholding and reporting:
Withholding Taxes:
Employers in New York State are required to withhold state income tax from employees’ wages based on their filing status and withholding allowances indicated on Form IT-2104, Employee’s Withholding Allowance Certificate. These withheld taxes must be remitted to the New York State Department of Taxation and Finance according to specific schedules, and employers must report the withheld amounts quarterly using Form NYS-45. Regular and accurate withholding ensures compliance with state tax laws and helps employees meet their tax obligations.
Withholding Forms and Due Dates
Form IT-2104: Employee’s Withholding Allowance Certificate
> Purpose: Employees use this form to indicate their withholding allowances to their employer.
> Due Date: Employees should submit this form to their employer upon starting employment or whenever there are changes to their withholding allowances.
Form NYS-1: Return of Tax Withheld
> Purpose: To remit the income tax withheld from employees’ wages.
> Filing Types and Due Dates for Form NYS-1:
- 5-Day Filer:
- Definition: Filers who withheld less than $15,000 during the calendar year preceding the previous calendar year.
- Due Date: Within 5 business days following the payroll that caused the total accumulated tax withheld to equal or exceed $700.
- 3-Day Filer:
- Definition: Filers who withheld $15,000 or more for the calendar year preceding the previous calendar year.
- Due Date: Within 3 business days following the payroll that caused the total accumulated tax withheld to equal or exceed $700.
Filing Forms and Due Dates
Form NYS-45: Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return
> Purpose: To report state income tax withheld, wages paid, and other related information.
> Due Dates: This form must be filed quarterly by the following dates:
- First Quarter: April 30
- Second Quarter: July 31
- Third Quarter: October 31
- Fourth Quarter: January 31 of the following year.
Form NYS-45-ATT: Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return – Attachment
> Purpose: To provide additional details or corrections related to Form NYS-45.
> Due Date: This form is filed along with Form NYS-45 on the same quarterly schedule.
Form IT-2102: Change of Resident Status – Informational Return
> Purpose: To inform the state of changes in employees’ residency status that affect withholding.
> Due Date: This form should be submitted whenever there is a change in an employee’s residency status that affects their tax withholding.
Annual Filing
Form NYS-1: Reconciliation of Withholding Tax
> Purpose: To reconcile quarterly filings and payments with annual totals.
> Due Date: Due annually by February 28 of the following year.
Form IT-2104.1: Certificate of Nonresidence and Allocation of Withholding Tax
> Purpose: For nonresidents who work in New York State to allocate their income for withholding purposes.
> Due Date: This form should be filed when the employee starts work or when there is a change in their work status.
Key Points for Employers
> Accurate Withholding: Ensure that the correct amount of state income tax is withheld from employees’ wages based on the information provided on Form IT-2104.
> Timely Payments: Remit withheld taxes promptly according to the schedule outlined for Form NYS-1.
> Quarterly Reporting: File Form NYS-45 quarterly to report withheld taxes and wages paid.
> Annual Reconciliation: Complete the annual reconciliation to confirm that all withheld amounts are accurately reported and paid.
> Employee Communication: Provide employees with necessary forms and updates, including Form W-2 at the end of the year.
Staying compliant with New York State income tax withholding requirements is crucial for avoiding penalties and ensuring smooth operations. Regularly review the New York State Department of Taxation and Finance guidelines to stay updated on any changes in tax laws or regulations.
Individual Responsibilities
Individuals also have obligations when it comes to New York State income tax:
> Filing Requirements: Individuals must file a New York State income tax return (Form IT-201 or IT-203) by April 15th, or the next business day if the 15th falls on a weekend or holiday.
> Estimated Tax Payments: If you receive income not subject to withholding (e.g., self-employment income), you may need to make quarterly estimated tax payments using Form IT-2105.
> Deductions and Credits: Explore deductions and credits available to reduce your taxable income, such as the standard deduction or itemized deductions, and credits like the Earned Income Tax Credit (EITC).
Standard Deductions
The standard deduction in New York varies based on your filing status. Here are the standard deductions for the year 2023:
| Filing Status | Standard Deduction Amount |
| Single (and can be claimed as a dependent on another taxpayer’s federal return) | $3,100 |
| Single (and cannot be claimed as a dependent on another taxpayer’s federal return) | $8,000 |
| Married filing joint return | $16,050 |
| Married filing separate return | $8,000 |
| Head of household (with qualifying person) | $11,200 |
| Qualifying surviving spouse | $16,050 |
Conclusion
Navigating New York State income tax requirements requires careful attention to detail and adherence to state regulations. By understanding your obligations as an employer or individual taxpayer, you can ensure compliance and manage your tax responsibilities effectively. Stay informed and proactive to avoid potential pitfalls and penalties associated with non-compliance.
Understanding New York State income tax empowers both employers and individuals to navigate tax season with confidence.
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Also Read:California State Income Tax: Your Ultimate Guide for Employers and Individuals
