A Guide to Filing NYC Tax Returns

November 7, 2018

The tax system here in the State of New York is a complex, layered system involving various kinds of taxes, forms, credits and exemptions. A survey of this vast system shows that it’s all too easy to become overwhelmed by its complexity. Most New York taxpayers have precious little time to devote to mastering the finer points of our taxation system. Understanding our complicated taxation system is still important, though.  That’s because we all must deal with the tax system, to some degree. Some New York taxpayers grapple with the system more than others; New York City taxpayers need to allocate substantial time to navigate all the requirements of NYC tax returns. Certainly, New York City taxes can be a big burden, but it’s also important to remember that the NYC tax system in NYC is an essential component in the mechanism that keeps the five NYC boroughs functional.  

An Additional NYC Tax Layer

New York City residents who earn income are subject to a layer of income tax imposed specifically by NYC. This layer of taxation is in addition to the other layers of tax imposed by New York State such as the New York State income tax, various sin taxes and other taxes like the bizarre New York sales tax  It’s even in addition to that imposed by local New York authorities, such as the MTA tax.   In this post, we’ll look at the New York City tax rate schedule imposed on New York City residents.  We’ll then review the NYC tax forms required to file New York City taxes. As we will see, the city tax of NYC is relatively modest when compared with the federal rate schedule, but even this modest tax can be onerous when you consider that NYC residents are also subject to all of the other  taxes discussed. Clearly, the Big Apple requires a lot of money to keep it running, and the New York City personal income tax contributes to that goal. 

Rate Schedules for NYC Tax Returns

As with the federal income tax system, NYC income tax is a graduated system based on personal income levels. The city tax in New York City is also similar to the federal system in that the City’s rate schedule is broken down according to a person’s status as either single, married filing jointly or separately, or as head of household. If a NYC resident files as married filing jointly or as a qualifying widow or widower, they face a rate of 3.078% on income between 0 and $21,600.  A rate of 3.762% will kick in on income between $21,600 to $45,000.  The rate of 3.819% covers income between $45,000 and $90,000, and a rate of 3.876% applies to income above $90,000. 

For persons filing either single or married filing separately, the NYC tax rate is 3.078% for income between $0 and $12,000.  The rate increases to 3.762% for income between $12,000 and $25,000.  The City’s tax rate increases further to 3.819% for income between $25,000 and $50,000. Finally, for income above $50,000, the New York City personal income tax rate     is 3.876% of income earned.

For those filing as head of household, the NYC tax rate for income between $0 and $14,400 s 3.078%.  The rate jumps to 3.762% for personal income between $14,400 and $30,000, and 3.819% for income between $30,000 to $60,000.  The New York city tax rate then climbs up to the usual high of 3.876% for income above $60,000. 

NYC Tax Tables May Help in Calculation

The foregoing rates aren’t daunting.  That’s particularly true when they’re compared with other rate schedules both within New York and elsewhere. Certain people, though, particularly those with high NYC income should be mindful of these rates.  That’s because NYC’s tax burden can be sizable depending on individual circumstances. When you file your  personal income tax return for NYC, it might be helpful to view the tax table provided by the New York State Department of Taxation & Finance.  That table will show precisely what your tax burden to New York City will be on incomes up to $65,000. 

Applicable NYC Tax Forms 

Filing a NYC tax return as a full resident of New York City is pretty straightforward. New York City dwellers will file form IT-201 and indicate their liability to New York City on line 47. NYC dwellers will compute this liability based on the taxable income indicated on line 38. Form IT-201 can be submitted electronically, which is the preferred route for most New York City taxpayers. This is actually the same form most New York taxpayers file when reporting their other tax liabilities to the State and other local taxing agencies.

New York City non-residents and NYC part-year residents will file form IT-203.  They will compute and report their NYC tax liability in the same manner as NYC residents. Notably, if a person has a change of residency status with respect to New York City residency, they will need to file form IT-360.1 in combination with either form IT-201 or IT-203 depending on the specifics of their situation. 

Our NYC Tax Lawyers Can Help

The NYC tax lawyers at Mackay, Caswell & Callahan, P.C., always try to bring vital information like this to the attention of our clients. Our New York City clients will hopefully find this post particularly helpful as they file their returns. If you’re a New York City busienss owner, it’s important to be aware of your NYC tax obligation. We can help you with that.  If you owe NYC tax debt and require assistance, please call us.

We’re here to answer any inquiry related to outstanding New York City tax debt.  We can walk you through the steps on how to address outstanding New York tax debt.  If a New York Offer in Compromise is the right answer for you, we can help with that, too.  Please get in touch with one of our top New York City tax attorneys and we can get started today! 

Image credit: GotCredit 

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