New York State Estate Tax Rate: Brackets, Cliff, and Exclusion

New York’s state estate tax rate is a graduated schedule running from 3.06% on the first $500,000 of taxable estate to 16% on amounts above $10,100,000. 1New York State Department of Taxation and Finance. ET-706 New York State Estate Tax Return Those rates only start biting once an estate exceeds the basic exclusion amount, which is $7,350,000 for deaths in 2026. 2Department of Taxation and Finance. Estate Tax And there is a catch that separates New York from most other states: if the estate exceeds 105% of the exclusion, the exclusion disappears entirely and the whole estate is taxed from the first dollar.

The 2026 Exclusion Threshold

An estate owes New York nothing if its taxable value falls at or below $7,350,000 for a decedent dying between January 1, 2026, and December 31, 2026. 2Department of Taxation and Finance. Estate Tax Under N.Y. Tax Law ยง 952(c)(2)(B), the exclusion starts from a $5 million base and adjusts annually for inflation, rounded to the nearest $10,000. 3New York State Senate. New York Tax Law 952 – Tax Imposed

One point catches executors off guard. The exclusion compares against the taxable estate, not the gross estate. The gross estate is the fair market value of everything the decedent owned at death. The taxable estate is what remains after subtracting allowable deductions like funeral costs, administrative expenses, debts, and charitable bequests. An estate that looks over the line on gross value can land safely under it once deductions are applied.

New York Estate Tax Rate Brackets

Once an estate crosses into taxable territory, New York applies fifteen brackets from Form ET-706: 1New York State Department of Taxation and Finance. ET-706 New York State Estate Tax Return

  • $0 to $500,000: 3.06% of the taxable estate
  • $500,001 to $1,000,000: $15,300 plus 5.0% of the amount over $500,000
  • $1,000,001 to $1,500,000: $40,300 plus 5.5% of the amount over $1,000,000
  • $1,500,001 to $2,100,000: $67,800 plus 6.5% of the amount over $1,500,000
  • $2,100,001 to $2,600,000: $106,800 plus 8.0% of the amount over $2,100,000
  • $2,600,001 to $3,100,000: $146,800 plus 8.8% of the amount over $2,600,000
  • $3,100,001 to $3,600,000: $190,800 plus 9.6% of the amount over $3,100,000
  • $3,600,001 to $4,100,000: $238,800 plus 10.4% of the amount over $3,600,000
  • $4,100,001 to $5,100,000: $290,800 plus 11.2% of the amount over $4,100,000
  • $5,100,001 to $6,100,000: $402,800 plus 12.0% of the amount over $5,100,000
  • $6,100,001 to $7,100,000: $522,800 plus 12.8% of the amount over $6,100,000
  • $7,100,001 to $8,100,000: $650,800 plus 13.6% of the amount over $7,100,000
  • $8,100,001 to $9,100,000: $786,800 plus 14.4% of the amount over $8,100,000
  • $9,100,001 to $10,100,000: $930,800 plus 15.2% of the amount over $9,100,000
  • Over $10,100,000: $1,082,800 plus 16.0% of the amount over $10,100,000

For estates between 100% and 105% of the exclusion, a partial credit reduces the calculated tax. Above 105%, the credit is gone and the table above applies to the full taxable estate.

The Estate Tax Cliff

This is the feature that turns a small overshoot into a large tax bill. Most states with an estate tax exempt a set amount and tax only the excess. New York does not. If the taxable estate exceeds 105% of the basic exclusion, the entire exclusion vanishes and the full estate is taxed starting from zero. 3New York State Senate. New York Tax Law 952 – Tax Imposed

For 2026, 105% of $7,350,000 is $7,717,500. Compare three estates:

  • A $7,350,000 estate sits at the exclusion. Tax owed: $0.
  • A $7,500,000 estate falls in the phase-out zone between 100% and 105%. A partial credit still applies, producing a modest bill.
  • A $7,717,501 estate is one dollar over 105%. The credit is gone. Tax is calculated on the full amount, landing in the $7.1M-$8.1M bracket, for roughly $734,800 owed.1New York State Department of Taxation and Finance. ET-706 New York State Estate Tax Return

An extra $367,500 in estate value produces more than $734,000 in tax. Between 100% and 105% of the exclusion, the credit phases out on a sliding scale, so precision in asset valuation matters enormously for estates anywhere near this range.

Lifetime Gifts That Get Added Back

New York pulls certain taxable gifts back into the estate. Any taxable gift made during the three years before the decedent’s date of death must be included in the New York gross estate if it is not already part of the federal gross estate. 2Department of Taxation and Finance. Estate Tax

There are exceptions. A gift is not added back if it was made while the decedent was a nonresident of New York, if it was made before April 1, 2014, or if it involved real or tangible property located outside New York State at the time of the gift. Gifts made between January 1, 2019, and January 15, 2019, are also excluded due to a brief legislative gap. 2Department of Taxation and Finance. Estate Tax

The practical effect: giving away $500,000 eighteen months before death does not shrink the New York estate. The gift gets folded back in, and an estate that seemed safely under the cliff can be pushed over. Gifts must clear the three-year window to stay out of the calculation.

How This Differs From Federal Estate Tax

The federal estate tax exemption for 2026 is $15,000,000 per person following passage of the One, Big, Beautiful Bill signed into law on July 4, 2025. 4Internal Revenue Service. What’s New – Estate and Gift Tax New York’s $7,350,000 exclusion is less than half of that, so many estates owe New York tax while owing nothing federally.

The second gap is portability. Federal law lets a surviving spouse inherit the deceased spouse’s unused exemption. New York does not offer portability. Each spouse’s exclusion is strictly individual, and unused amounts do not transfer. Married couples aiming to use both exclusions typically structure plans so each spouse’s exemption is applied at that spouse’s death.

Who Has to File, and When

Form ET-706 is required if the decedent was a New York resident at death and the federal gross estate plus any includible taxable gifts exceeds $7,350,000. 5New York State Department of Taxation and Finance. Instructions for Form ET-706 New York State Estate Tax Return The filing threshold looks at the gross estate, so an $8 million gross estate that deducts down to $6 million taxable still has to file, even though nothing is owed.

Nonresidents must file if they owned real or tangible personal property located in New York and their entire federal gross estate exceeds the exclusion. The tax itself applies only to the New York-situated property, but the filing test looks at worldwide assets.

The return is due, and the full tax must be paid, within nine months of the date of death. 6New York State Department of Taxation and Finance. Instructions for Form ET-133 Application for Extension of Time to File and/or Pay Estate Tax Form ET-133 gives an automatic six-month extension to file, but not to pay. An extension of time to pay is available only if the executor shows that paying on time would cause undue hardship to the estate. 7New York State Department of Taxation and Finance. Form ET-133 Application for Extension of Time to File and/or Pay Estate Tax

Late filing carries a penalty of 5% of the unpaid tax per month or partial month, capped at 25%, plus interest from the original due date. On a six- or seven-figure bill, those charges compound quickly. Once the return is processed and the tax is satisfied, the state issues a closing letter that lets the executor finalize distributions.