N.Y. Estate Tax


The estate tax rate in the state of New York is between 5 and 16 percent depending on the value of your estate. If you are the administrator of an estate in New York, you should be aware that you must file your estate tax within nine months of the decedent’s death. You must file a New York State estate tax if the amount of the federal gross estate, combined with any includible gifts, exceeds the basic exclusion amount applicable at the date of death.

Currently, the exemption limit in New York for the estate tax is $3,125,000. Recent legislature signed by Gov. Cuomo on April 1, 2014, however, will increase the exemption amount each year until it reaches the federal limit.

The exemption schedule is as follows:

  • Deaths as of April 1, 2014 and before April 1, 2015 = $2,062,500.
  • Deaths as of April 1, 2015 and before April 1, 2016 = $3,125,000.
  • Deaths as of April 1, 2016 and before April 1, 2017 = $4,187,500.
  • Deaths as of April 1, 2017 and before January 1, 2019 = $5,250,000.

By January 1, 2019, the state exemption limit is expected to reach the federal limit, which is projected to be $5.9 million.

NY taxes the entire estate!

You read that right. While most states tax the amount over the exemption limit, New York taxes the entire value of the estate. In New York, if the estate is valued at $3.75 million, the entire $3.75 million is taxed — not the $650,000, which is the amount over the exemption limit. Even the federal government only taxes the amount over the exemption limit.

Marital deductions

Any property you bequeath to your spouse is exempt from both federal and state taxes, regardless of the amount. Depending on the total value of your assets, you can gift property to your spouse to reduce the value of your estate to below the exemption limit. However, there are various legal and financial reasons you should never leave all your assets to your spouse.

When it comes to estate planning, the larger the estate, the more complicated the issues. An experienced attorney can help you navigate the legal system. Whether you would like to set up your own estate plan or need help with the NY probate process, a skilled lawyer can help. To discuss your estate planning matter today, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com, or call 908-236-6457.

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