How Do Estate Taxes Work in New York State?

How Do Estate Taxes Work in New York State?

When a person passes away in New York state, their estate may face taxes that must be paid before any inheritance can be issued to their beneficiaries. For more information, continue reading to understand how one of the experienced New York City wills, trusts & estates attorneys at Zimmet Law Group, P.C., can help you navigate these estate taxes.

Do I need to pay federal estate taxes?

Fortunately for you, the odds are that your estate is too small to be charged with federal estate taxes. That is, as of 2021, these taxes only apply if your assets are worth $11.7 million or more. And as of 2022, this increased to $12.06 million or more.

Do I need to pay estate taxes in New York state?

Like most other taxes, estate taxes are determined based on the bracket into which your estate falls. In New York state, the basic exclusion amounts for recent years are as follows:

  • On or after April 1, 2017, and before January 1, 2019, taxes apply for $5,250,000 or more.
  • On or after January 1, 2019, and before January 1, 2020, taxes apply for $5,740,000 or more.

With that being said, a tax return must be filed if the amount of your federal gross estate plus the amount of any includible gifts is greater than the basic exclusion amount applicable at the date of your death.

To elaborate further, an includible gift is any taxable gift that was made during the three years before the date of your death and it is not included as part of the federal gross estate. The following are gifts that are not included:

  • Gifts made after January 1, 2019.
  • Gifts that were of tangible property that were located outside of New York state.
  • Gifts that were given before April 1, 2014.
  • Gifts that were given while you were not a resident of New York state.

When do I have to file estate taxes in New York state?

All estate taxes must be filed and paid by the executor of your estate within 9 months of your passing. If your executor needs an extension to pay tax or to file a return, they may be granted up to six months more. However, if making the tax payment would result in undue hardship for an estate, they may be granted an extension of up to four years more. But, if they file or pay late, they 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 further questions, reach out to one of our skilled attorneys at our experienced New York City general practice law firm today.

Contact Our New York City Firm

If you require the services of an effective New York City attorney of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, or landlord-tenant law, contact Zimmet Law Group, P.C. today to schedule a consultation.

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