Yes. New York is one of the few states that still collects an estate tax. An estate tax is a type of death tax that is calculated based on the net value of the property a deceased person owns. These taxes apply to both residents and nonresidents who own property in the state.
What Is New York’s Estate Tax?
Prior to April 1, 2014, New York’s estate tax followed a 1998 federal tax code that had an exemption fixed at $1 million. This meant that despite inflation and even though property values rose, only estates with a net worth valued at less than $1 million would not be taxed. This disparity became increasingly stark, as the current federal exemption is over $5 million.
Thus, New York passed the following schedule, providing the applicable exemption based on the date someone dies:
- April 1, 2014 and before April 1, 2015: $2,062,500
- April 1, 2015 and before April 1, 2016: $3,125,000
- April 1, 2016 and before April 1, 2017: $4,187,500
- April 1, 2017 and before January 1, 2019: $5,250,000
By January 1, 2019, the idea is to have New York’s estate tax schedule uniform to the current federal tax exemption. It is worth noting that for individuals who died on March 31, 2014, the $1 million exemption will still apply.
Should I Seek Legal Advice?
Due to the current changes and the complicated nature of tax and estate law, if you are a New York resident or a nonresident with property in the state, you should seek the advice of a New York estate lawyer. A lawyer near you will be able to explain the current applicable tax code to you and help you take the proper steps in managing your estate.