New York Estate Tax

Under federal and state law, there are taxes that your estate will be required to pay when you transfer money after you pass away. Your estate may be subject to paying income tax as well as estate tax. The requirement of paying estate income tax is similar to the requirement of paying individual income tax. After your death, your estate must pay tax on any income it earns until your estate is closed. The other type of tax that your estate may be required to pay is the estate tax. However, unlike estate income tax, it does not have to be paid each year the estate is open, but just one time. The estate tax is based on the value of your estate at the time of your death. Payment of the estate tax as well as estate income tax is the responsibility of the executor. If you are concerned about the estate taxes your estate may be subject to or if you are an executor of an estate and are concerned about estate taxes, contact an experienced New York Estate Tax Lawyer who will explain to you the estate tax requirements of both federal and New York law.

New York Estate Tax Rules

If an estate has a value of more than $3,125,500 at the time of the testator's death, then under New York estate tax rules the executor of the estate must file an estate tax return. This means that estates with a value of $3,125,500 or less are exempt from filing estate tax returns. The exemption amount changes each year. If an estate exceeds the exempt amount by as little as 5%, then the entire value of the estate will be taxed, not just the amount of the estate that exceeds the exempt amount.

The New York estate tax rules apply to New York residents who are U.S. citizens, as well as residents of other states who are U.S. citizens and own real estate or other tangible property in New York. If you are not a resident of New York and you are not a U.S. citizen but you have real estate or other tangible property in New York, then an estate tax return will be required if the estate is required to file a federal tax return.

The New York estate tax rate is a progressive one that starts at 5.085% and rises to 16% for amounts above $10,040,000.

Federal Estate Tax Rules

In addition to being subject to New York estate tax rules your estate may be subject to federal estate tax rules. Under federal law estates with a value of over $5,340,000 are subject to filing federal estate tax returns. The exemption amount will jump to $5,900,000 in 2019. In 2019 the New York exempt amount will also be $5,900,000.

The maximum federal estate tax rate is 40%.

Surviving Spouse Exemption

Under New York law any property you leave to your surviving spouse is exempt from both New York and federal estate tax regardless of the value of the property.

Example

The decedent is a New York resident and a U.S. citizen who passed away in 2015. The value of his estate is $4,000,000. The entire $4,000,000 estate will be subject to New York estate tax. The estate will not be subject to federal estate tax.

The decedent is a New York resident and a U.S. citizen who passed away in 2015. The value of his estate is $6,000,000. The decedent leaves his entire estate to his wife. The estate will be subject to neither New York estate tax nor federal estate tax.

Estate taxes can be complicated. There are many factors that go into determining how much if anything an estate will owe the federal or state government. If you get it wrong and underpay, the estate may be subject to interest and fees. The staff at Stephen Bilkis & Associates, PLLC has extensive estate planning experience and frequently represents clients before the New York Surrogate's Court. Contact us at 1.800.NY.NY.LAW (1.800.696.9529) to schedule a free, no obligation consultation regarding your estate matter. We serve individuals throughout the following locations:

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