If you live in New York City, you owe New York State income tax at 4% to 10.9% and a separate NYC resident income tax at 3.078% to 3.876%, plus 8.875% sales tax on most purchases and a property tax calculated under the city’s four-class assessment system. Both income taxes are reported on a single state return, Form IT-201, due April 15. The NYC and New York State tax rules that follow walk through who owes what, how the brackets work, which credits reduce the bill, and what happens if you file or pay late.
Who Has to Pay NYC Tax
New York uses two tests to decide if you are a resident for tax purposes. You are a resident if New York is your domicile, meaning your permanent home and the place you intend to return to after any absence. The state looks at factors like where your family lives, where you work, and where you keep your most significant belongings.1New York State Senate. New York Code Tax Law 605 – General Provisions and Definitions
Even without a New York domicile, you are a statutory resident if you keep a permanent place of abode in the state and spend more than 183 days here during the year. Active-duty military members are excluded.1New York State Senate. New York Code Tax Law 605 – General Provisions and Definitions Meeting either test makes you a full-year resident who must report worldwide income.
The city income tax applies on top of the state tax if you live in any of the five boroughs. Residents elsewhere in the state do not pay it. Yonkers has its own surcharge, but it operates under separate rules and does not apply to NYC residents.2Justia Law. New York Laws YTS – Yonkers Income Tax Surcharge
If you moved into or out of New York during the year, you file as a part-year resident on Form IT-203 rather than IT-201, and you owe tax only on income earned while a resident plus any income from New York sources during the rest of the year.3New York State Department of Taxation and Finance. Form IT-203, Nonresident and Part-Year Resident Income Tax Return Nonresidents with New York-source income (New York wages, rental property in the state) use the same form.
Income Tax Rates for 2025
Both the state and the city use progressive brackets, so higher rates apply only to the income above each threshold. You calculate both on the same return.
State Rates
New York State income tax runs from 4% on the lowest taxable incomes to 10.9% at the top.4Tax Foundation. 2026 State Tax Competitiveness Index – New York The exact bracket cutoffs depend on filing status and are published each year by the Department of Taxation and Finance.
NYC Resident Rates
For a single filer, the city brackets are:
- 3.078% on the first $12,000 of taxable income
- 3.762% on income from $12,001 to $25,000
- 3.819% on income from $25,001 to $50,000
- 3.876% on income above $50,000
Married couples filing jointly reach the top 3.876% rate at $90,000, and heads of household reach it at $60,000.4Tax Foundation. 2026 State Tax Competitiveness Index – New York The spread between the lowest and highest city rates is under one percentage point, so in practice the city tax is close to flat. Stacked on the top state rate, the combined marginal rate at the top of both schedules is 14.776%, before any federal tax.
Standard Deduction
New York’s standard deduction is separate from (and smaller than) the federal one. For the 2025 tax year, filed in 2026:5New York State Department of Taxation and Finance. 2025 Standard Deductions
- Single: $8,000, or $3,100 if someone else can claim you as a dependent
- Married filing jointly: $16,050
- Head of household: $11,200
You can itemize instead, but the calculation starts from your federal itemized deductions with New York-specific modifications applied on top.
Credits That Reduce Your Bill
A handful of credits are worth checking before you finalize your return.
Earned Income Credit
If you qualify for the federal Earned Income Tax Credit, you automatically qualify for both the New York State version, equal to 30% of the federal credit, and the NYC version, which runs 10% to 30% of the federal credit depending on your adjusted gross income.6New York State Department of Taxation and Finance. New York City Credits Together they can add meaningfully to a refund.
NYC Household Credit
This nonrefundable credit is available to NYC residents who cannot be claimed as a dependent on someone else’s federal return. Single filers with federal AGI of $12,500 or less can get up to $15. For joint filers and heads of household, the income threshold is $22,500 and the amount depends on how many dependents you claim.6New York State Department of Taxation and Finance. New York City Credits Small, but easy to overlook.
STAR for Homeowners
The School Tax Relief program reduces property taxes for owner-occupants. Basic STAR is available if the combined income of all owners and their spouses is $500,000 or less.7New York State Department of Taxation and Finance. STAR Resource Center Enhanced STAR is for homeowners age 65 or older with combined income of $110,750 or less.8New York State Department of Taxation and Finance. STAR Eligibility STAR arrives as a check or direct deposit rather than a reduction on the property tax bill itself.
Sales Tax
The total sales tax rate in New York City is 8.875%, made up of 4.0% state, 4.5% city, and a 0.375% Metropolitan Commuter Transportation District surcharge.9NYC311. Sales Tax
Clothing and footwear priced under $110 per item are exempt from both the state and city portions.10NYC Department of Finance. New York State Sales and Use Tax Once a single item hits $110, the full 8.875% applies to the whole price of that item. The exemption is permanent, not a holiday.
Property Tax
NYC sorts every property into one of four tax classes, each with its own assessment ratio and rate:
- Class 1: one- to three-unit residential properties and some vacant land
- Class 2: residential buildings with four or more units, including condos and co-ops
- Class 3: utility equipment and special franchise property
- Class 4: commercial property, including offices, stores, factories, and hotels
For Class 1, the assessment ratio is 6% of market value for the 2026–27 fiscal year. The Class 1 tax rate for 2025–26 was 20.085% of assessed value, with the new rate set annually by the City Council. The rate applies to assessed value, not market value, so a home with a $1 million market value has an assessed value of roughly $60,000 under the 6% ratio.
Homeowners age 65 or older with combined household income of $58,399 or less may qualify for the Senior Citizen Homeowners’ Exemption, which reduces assessed value.11NYC.gov. Senior Citizen Homeowners’ Exemption (SCHE) The city can place a lien on properties with delinquent taxes, so staying current matters.
Filing: Forms, Deadline, and How to Submit
Full-year New York State residents file Form IT-201, which handles both state and city income tax on one return. If you are claiming credits, attach Form IT-201-ATT.12New York State Department of Taxation and Finance. Full-Year New York State Resident Forms and Instructions Part-year residents and nonresidents use Form IT-203.3New York State Department of Taxation and Finance. Form IT-203, Nonresident and Part-Year Resident Income Tax Return
The 2025 return is due April 15, 2026.13New York State Department of Taxation and Finance. NYS Tax Department Shares Filing Tips As April 15 Deadline Approaches You can request an automatic extension to file, but it does not extend the time to pay. Any balance owed must be estimated and paid by April 15 to avoid penalties and interest.14New York State Department of Taxation and Finance. Apply for an Extension of Time to File an Income Tax Return Mailed returns must be postmarked by that date.
The state’s Web File system takes returns directly through the Department of Taxation and Finance website, with payment by bank debit. Commercial tax software also supports New York e-filing. E-filers must enter driver’s license or state ID information fresh each year, including the ID number, issue date, expiration date, and issuing state; it cannot be carried over from a prior year, and leaving it off delays refunds.15New York State Department of Taxation and Finance. Driver License Requirement for Taxpayers
Paper returns go to one of two addresses depending on whether a payment is enclosed:16New York State Department of Taxation and Finance. Mailing Addresses (Personal Income Tax Returns)
- Refund expected: State Processing Center, PO Box 61000, Albany, NY 12261-0001
- Payment enclosed: State Processing Center, PO Box 15555, Albany, NY 12212-5555
NYC residents enter school district code 601 on the return. An incorrect code can slow processing because the state uses it to route local revenue.
Estimated Payments for Income Without Withholding
Freelance income, rental income, and investment gains typically are not subject to withholding, so you may owe quarterly estimated payments. For the 2026 tax year, the installments are due April 15, June 15, and September 15, 2026, and January 15, 2027.17New York State Department of Taxation and Finance. Estimated Tax Payment Due Dates The same payment covers both your state and city tax.
Self-employed people working within the five boroughs may also owe the Metropolitan Commuter Transportation Mobility Tax at 0.60% on net self-employment earnings above $50,000. Missing an estimated payment triggers an underpayment penalty separate from interest.
What Late Filing or Late Payment Costs
New York assesses filing and payment penalties separately, and they can run at the same time.
The late filing penalty is 5% of the unpaid tax for each month or part of a month the return is overdue, capped at 25%. If the return is more than 60 days late, the minimum penalty is the lesser of $100 or 100% of the tax due.18New York State Department of Taxation and Finance. Interest and Penalties
The late payment penalty is 0.5% of the unpaid balance per month, also capped at 25%, and it applies even if you filed on time.18New York State Department of Taxation and Finance. Interest and Penalties Interest runs on top of both. For the first quarter of 2026, the rate on unpaid income tax is 9.5% per year, and it is reset quarterly.19New York State Department of Taxation and Finance. Interest Rates: 1/01/2026 – 3/31/2026
Practically, the filing penalty is ten times the monthly payment penalty, so if the return is not ready by April 15, file an extension and pay whatever you can estimate. That is far cheaper than skipping both.
Payment Plans
If you owe more than you can pay, you can request an Installment Payment Agreement through your online account. The online option handles balances of $20,000 or less, repayable over 36 months or fewer.20New York State Department of Taxation and Finance. Request an Installment Payment Agreement (IPA) Larger balances or longer terms require contacting the department directly.
Interest and penalties keep accruing throughout the plan, so paying ahead of schedule saves money. Missing a scheduled payment can void the agreement and expose you to collection action.21NY.gov. Installment Payment Agreement (IPA)