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When a person passes away in the state of New York, their estate may face taxes that must be paid before any inheritance can be issued to beneficiaries. Please be aware that estate tax is different from inheritance tax. Like most other taxes, estate taxes are determined based on the bracket in which a person’s estate falls into. In New York State, any estate that is valued less than $5.25 million is exempt from paying estate taxes.

Filing Tax Returns

If the estate in question was that of a New York State resident, a tax return must be filed if the amount of the resident’s federal gross estate plus the amount of any includible gifts is greater than the basic exclusion amount applicable at the date of death. This is complex. Let’s break it down.

An includible gift is any taxable gift that was made during the three years prior to the date of the decedent’s death and it is not included as part of the federal gross estate. It is important to note that gifts made by a decedent who passed away after January 1, 2019, are not included. Other gifts that are not included are those that were of tangible property that was located outside of New York State, gifts that were given prior to April 1, 2014, and gifts given while the decedent was not a resident of New York State.

The basic exclusion amounts for recent years are as follows:

  • On or after April 1, 2017, and before January 1, 2019, is $5,250,000.
  • On or after January 1, 2019, and before January 1, 2020, is $5,740,000.

All estate taxes must be filed and paid by the executor of the decedent’s estate within 9 months of the decedent’s passing. If you need an extension to pay tax or to file a return, you may be granted usually up to six months. However, if making the tax payment would result in undue hardship for an estate, you may be granted an extension of up to four years. If you file or pay late, you can be subject to penalties plus interest on any late payments. Interest may also accrue on payments that have been granted an extension.

If you have any questions about the tax consequences of your estate, contact us today.

Zimmet Law Group, P.C. is an experienced team of attorneys guiding clients through matters of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, and landlord-tenant law. If you require the services of an effective New York City attorney, contact our firm today to schedule a consultation.