New York Retirement

Persons planning to retire in New York should know that all residents of the Empire State are required to pay the state's income tax. The lowest personal income tax rate in New York is 4% but there is no minimum income level. The highest tax rate in New York State is 6.85% with the minimum income level for this rate set at only $20,000.

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Social Security and Many Pensions Not Covered by NY Income Tax

The good news for seniors is that Social Security benefits, federal pensions, government pensions, New York State pensions, military pensions, railroad pensions, and some other benefits are not subject to the state income tax in New York State. The bad news is that any income derived from a private source, including investments, jobs, and corporate pensions, will fall under the New York State income tax.

This means that most retired persons living in New York State will have to file a state income tax return in addition to a federal income tax return. Even some seniors that do not have to file a federal return may have to file a New York State income tax return.

Pension and Annuity Tax Break for New York Seniors

New York State residents who are over 59½ years in age could qualify for a Pension and Annuity Income Tax Exclusion of up to $20,000. This effectively means that the first $20,000 a person had in his or her private pension or annuity would not be subject to state income taxes. To qualify for this break, you will have to file a New York State income tax return.

New York City Income Tax

Residents of the Big Apple will have to pay an additional Personal Income Tax. This tax is collected by the New York State Department of Revenue, but the revenue goes to the city government. All New Yorkers who earn income will have to pay this tax. Non-residents who live in New York City, even part time, are subject to this tax. The city income tax is included in the New York state tax return every resident files each year.

The standard rate for New York City income tax is $628 for income over $21,000 a year plus 3.534%. This rate increases to $1,455 plus 3.648% for persons and couples making between $45,000 and $90,000. Since the city income tax is filed through New York State, the exemptions to it mirror state income tax exemptions.

New York Property Tax

Property taxes in New York State are collected by local city and county governments. Since there are hundreds of municipalities in New York, property tax rates can vary widely. The New York state Office of Real Property Tax Services has provided this Calculator to help residents determine their property tax rates.

Property tax exemptions and tax credits are available for seniors and others. You can learn about these by contacting the New York State Office of Real Property Tax Services. Basic property tax exemptions are limited to those making less than $500,000 a year.

New York Sales Tax

Sales taxes can vary in New York but the standard rate in the state is around 8%. The state collects a 4% sales tax but local governments can add another 4% to this rate. New York's sales tax does not apply to groceries, most services, or prescription drugs. It does apply to utilities, phone service, and most retail sales. Some services not covered by the state sales tax could be subject to local sales taxes. For example, haircuts are not taxed by the state but are taxed by New York City. The state's Department of Revenue has prepared a List of what is covered by state and local sales taxes.

Capital: Albany
Cost of Living Rank: #45
Sales Tax: 4.0%
Income Tax: 4.0% - 8.97%
State Website: