Westchester Income Tax: Yonkers Surcharge and MCTMT Rules

Westchester County does not impose its own income tax. The only Westchester income tax obligation at the local level applies to people connected to Yonkers: residents pay a surcharge of 16.75 percent of their net New York State tax, and nonresidents who earn wages or self-employment income inside the city pay a separate earnings tax of 0.5 percent. Live anywhere else in Westchester and work anywhere outside Yonkers, and your local income tax bill is zero.

No County Tax Outside Yonkers

Unlike New York City, Westchester County has no county-level personal income tax and no local corporate income tax.¹ That holds for every municipality in the county except Yonkers, which has its own local income tax authorized by state law. White Plains, New Rochelle, Mount Vernon, Scarsdale, Yorktown, Rye — none of them impose a local income tax. You file your New York State return and owe nothing more at the local level.

Yonkers Resident Income Tax Surcharge

If you live in Yonkers, you owe a surcharge equal to 16.75 percent of your net state tax.² The surcharge is not calculated on your income directly. It’s a percentage of the New York State income tax you owe after subtracting most nonrefundable credits but before applying payments or refundable credits. If your net state tax comes to $5,000, the Yonkers surcharge adds $837.50. The amount is reported on your IT-201 return and collected by the state, not by the city.

Part-Year Yonkers Residents

If you moved into or out of Yonkers during the tax year, you only owe the surcharge for the portion of the year you lived there. Part-year residents file Form IT-360.1 alongside their state return to compute the prorated amount.³ The calculation divides income attributable to the residency period by total New York source income for the full year, then applies the 16.75 percent rate to the prorated net state tax. Document your move-in or move-out date carefully; an error here means either overpaying or triggering a notice of adjustment.

Yonkers Nonresident Earnings Tax

If you work in Yonkers but live elsewhere, you face a different obligation: a flat 0.5 percent tax on wages and net self-employment income earned within the city.⁴ The rate is much smaller than the resident surcharge, but it catches people off guard because they assume living outside Yonkers means no Yonkers tax at all.

You report this tax on Form Y-203 and attach it to your IT-201 or IT-203 state return. Taxable wages follow the federal definition under Internal Revenue Code Section 3401(a) and include salaries, bonuses, tips, commissions, and severance pay. Self-employment income counts too, based on net earnings from a trade or business carried on in Yonkers.⁵ Investment income — dividends, interest, capital gains — is not subject to the nonresident earnings tax.

You can skip Form Y-203 if all of the following apply: you don’t have to file a New York State return, you were a Yonkers nonresident the whole year, your Yonkers income was only wages, and either your total wages subject to the tax were $3,000 or less, or your single employer withheld the correct amount.⁵

How Yonkers Residency Is Determined

Your residency status controls which tax you owe — the 16.75 percent surcharge, the 0.5 percent earnings tax, or neither. Yonkers residency follows the same definition used for New York State residency, applied to the city. You’re a Yonkers resident if your domicile is in Yonkers, or if you maintain a permanent place of abode in the city for substantially all of the tax year and spend 184 days or more there.⁶ Any part of a day counts as a full day.⁷

If you moved during the year, your residency status changes on the actual date of the move. You’d be a part-year Yonkers resident and a nonresident (or simply a non-Yonkers Westchester resident) for the remainder. The move date determines which tax applies to which portion of your income.

Which Forms You File

Every New York State resident starts with Form IT-201, the full-year Resident Income Tax Return.⁸ From there, your situation decides what else you attach.

Full-year Yonkers residents calculate the surcharge on IT-201 and report it through Form IT-201-ATT, which handles additional tax credits and local taxes.⁹
Part-year Yonkers residents file Form IT-360.1 to compute the prorated surcharge.¹⁰
Nonresidents working in Yonkers file Form Y-203 to report the 0.5 percent earnings tax.⁴
Everyone else in Westchester files IT-201 only. No local tax forms are required.

Your W-2 is the quickest way to verify any local withholding. Box 18 shows local wages, Box 19 shows local income tax withheld, and Box 20 names the locality. If your employer withheld Yonkers tax, the locality name should appear in Box 20.

One Other Line Item: The MCTMT

Westchester sits within Zone 2 of the Metropolitan Commuter Transportation District, so one more charge can show up on your return: the Metropolitan Commuter Transportation Mobility Tax.¹¹ It isn’t technically an income tax, and if you work for an employer the MCTMT is the employer’s obligation, not yours. Self-employed individuals with net earnings above the applicable threshold owe it themselves. Check the Department of Taxation and Finance’s MCTMT page for the current threshold and rates.

Filing Deadline and Estimated Payments

For tax year 2025, your New York State return — including any Yonkers surcharge or earnings tax — is due April 15, 2026. That same date is the deadline to request an extension.¹² An extension buys you more time to file but not more time to pay. Interest and late payment penalties still apply to any balance owed after April 15.

If you expect to owe Yonkers nonresident earnings tax of $300 or more after withholding and credits, you may need to make quarterly estimated payments. This applies when your expected withholding will cover less than 90 percent of your current-year tax or less than 100 percent of your prior-year tax (110 percent if your adjusted gross income exceeded $150,000).⁵ For the broader New York State estimated tax obligation, the threshold for tax years beginning in 2026 rises to $5,000, up from $1,000 in prior years.

Penalties and Interest

Missing the deadline or underpaying triggers penalties that stack. New York applies them to state and local taxes reported on the same return.

The late filing penalty is 5 percent of the unpaid tax for each month (or partial month) the return is late, capped at 25 percent. If the return is more than 60 days late, the minimum penalty is the lesser of $100 or 100 percent of the tax due.¹³
The late payment penalty is 0.5 percent of the unpaid tax per month, also capped at 25 percent. It applies even if you filed on time but didn’t pay the full balance.¹³
Interest on underpayments is set quarterly. For the first quarter of 2026, the rate is 9.5 percent per year, compounded daily.¹⁴

Both penalties can run at once, with interest on top. A return three months late with an unpaid balance faces 15 percent in filing penalties, 1.5 percent in payment penalties, and daily-compounded interest. The state may waive penalties for reasonable cause. Interest is never waived.

1
Westchester County Department of Planning. Westchester County Department of Planning Databook – Section: Resident Taxes
2
City of Yonkers, NY. Article IX Income Tax Surcharge – Section 15-111 Amount of Surcharge
3
New York State Department of Taxation and Finance. Instructions for Form IT-360.1 Change of City Resident Status
4
New York State Department of Taxation and Finance. Form Y-203 Yonkers Nonresident Earnings Tax Return
5
New York State Department of Taxation and Finance. Instructions for Form Y-203 Yonkers Nonresident Earnings Tax Return
6
New York State Department of Taxation and Finance. Income Tax Definitions – Section: Resident
7
Department of Taxation and Finance. Frequently Asked Questions about Filing Requirements, Residency, and Telecommuting for New York State Personal Income Tax
8
New York State Department of Taxation and Finance. Resident Income Tax Return IT-201
9
New York State Department of Taxation and Finance. Instructions for Form IT-201 Full-Year Resident Income Tax Return
10
New York State Department of Taxation and Finance. Form IT-360.1 Change of City Resident Status
11
New York State Department of Taxation and Finance. Metropolitan Commuter Transportation Mobility Tax (MCTMT)
12
New York State Department of Taxation and Finance. Filing Due Dates
13
New York State Senate. New York Tax Law TAX 685 – Additions to Tax and Civil Penalties
14
New York State Department of Taxation and Finance. Interest Rates 1/01/2026 – 3/31/2026