The New York City Income Tax—Rates and Available Credits
Tax Rates, Tax Credits, and Filing Information for NYC
New York City is one of just a few cities in the U.S. that has a personal income tax. The tax is calculated and paid on your New York State income tax return. There are no deductions available, but the city offers some separate credits of its own.
Who Has to Pay New York City Income Tax?
Every income-earning individual, estate, and trust residing or located in New York City must pay the New York City personal income tax. Taxpayers who lived in NYC for only part of the year can calculate their tax based on the number of days they lived in the city.
New York City government employees who were hired on or after Jan. 4, 1973 must pay the tax even if they don't live in the city. They must pay a city income tax equal to what they would have paid had they lived there.
The city tax is in addition to any income tax you might owe to the state of New York.
New York City Income Tax Rates
New York City has five tax brackets ranging from 2.907 percent to 3.876 percent. Rates kick in at different income levels depending on filing status.
The lowest rate applies to single and married filing separately taxpayers on incomes up to $12,000. Head of household filers qualify for this rate on incomes up to $14,400. Those who are married and filing joint returns qualify on incomes up to $21,600 as of 2018. The next tax bracket jumps to 3.534 percent, then to 3.591 percent, then to 3.648 percent.
The highest bracket applies to incomes of over $500,000 for all filing statuses.
New York City Income Tax Deductions
New York City's income tax is based on your New York State taxable income, which is your gross income less any New York State tax deductions you can claim. There are no tax deductions specifically for the New York City income tax.
New York City Income Tax Credits
Tax credits reduce the amount of income tax you owe. They come directly off your liability to the taxing authority. Some credits are refundable—you'll receive a refund of any portion of the credit that's left over after reducing your tax liability to zero.
New York City offers several tax credits. They can offset what you owe the city, but, unfortunately, they will not affect the amount of New York State income tax you might owe.
The NYC Child and Dependent Care Credit
Full-year and part-year New York City residents who paid child care expenses for children under the age of three as of the last day of the tax year might be eligible to claim this credit.
Your household federal adjusted gross income (AGI) must be no more than $30,000 as of 2018. The credit amount can be as much as 75 percent of your New York State dependent care credit, depending on your income. You can claim both the city and state credit if you qualify. This is a refundable credit.
The NYC Earned Income Credit
The New York City earned income tax credit is equal to 5 percent of your allowable federal earned income tax credit. Full-year residents and part-year residents of NYC who claimed the federal earned income credit can claim the New York City earned income credit.
New York State offers an earned income credit as well. You can still qualify for an NYC earned income credit even if you don't qualify for the state credit, and you can claim both if you do qualify for the state credit. This tax credit is also refundable.
The NYC Household Credit
You might qualify for the New York City household credit if you can't be claimed as a dependent on another taxpayer’s federal income tax return. This credit is available to resident and part-year residents of New York City.
The amount of the credit is determined by your income and filing status. Credit amounts range from $15 to $30 with an additional $10 to $30 for each additional exemption claimed on your federal return.
The NYC School Tax Credit
The New York City school tax credit is available to New York City residents or part-year residents who can't be claimed as a dependent on another taxpayer’s federal income tax return. You can take a refundable credit of $125 if you're married and filing a joint return and you have income of $250,000 or less. All other taxpayers with incomes of $250,000 or less can receive a refundable credit of $62.50.
No credit is allowed for taxpayers with incomes of more than $250,000.
The NYC Enhanced Real Property Tax Credit
This credit is offered to renters and homeowners living in residences that were not totally exempted from real property taxes during the tax year. Your household income must be less than $200,000 as of 2018.
You must have resided within the city for the entire year and in the same residence for at least six months. You can't be claimed as a dependent on anyone else's federal tax return. This credit can be as much as $500.
Effect on Your Federal Return
Prior to 2018, you could deduct the full amount of state and local taxes you paid on your federal return if you itemized. You can still claim this deduction, but the Tax Cuts and Jobs Act has now placed a cap on exactly how much you can deduct. The limit is $10,000 as of January 2018, and this includes any property taxes you might also pay.
Filing Your Return
The New York City personal income tax is filed with New York State on your state income taxre return. Forms can be found on the New York Department of Taxation and Finance's website. You can file your return by mail or e-file it.
New York City government employees must file an additional tax form—Form NYC-1127.
Taxes are due by April 15 and should be paid along with your New York State income tax.