4 Tax Laws Every New Yorker Needs to Know

Filing New York state income taxes involves a few state tax laws that are different from the IRS rules at the federal level. New York taxpayers should be prepared so you can save money and avoid stress at tax time.

Let's look at four big New York state tax laws and requirements that could affect your taxes in 2024.

1. New York tax-filing deadlines (and how to get an extension)

Don't be late to file your New York taxes. In New York, the penalties for being late to file your state income tax return can be worse than the penalties for late tax payment.

For most people, the New York tax-filing deadline (for 2023 taxes) is April 15, 2024. If you are unable to meet that deadline, you can request a six-month extension, and have until October 15, 2024 to finish and file your New York tax return.

If you need a six-month extension, you must apply in advance, before your New York tax-filing deadline.

2. New York standard deduction

The New York standard deduction for state income taxes is significantly lower than the federal standard deduction. Here's how the 2023 New York standard deduction compares to the feds, for a few common filing statuses:

For example, if you're single, your federal standard deduction is $5,850 higher than it is for your New York tax return. Unless you have a lot of other deductions and can itemize on your New York taxes, your New York state taxable income could end up being thousands of dollars higher than your taxable income for federal income taxes.

3. New York itemized deductions

One of the biggest differences in filing state tax returns is that not every state uses the same rules as the IRS. New York offers some state income tax deductions that the IRS no longer allows for federal taxes. And some New York state income tax deductions still use some of the same rules from the federal tax code from the 2017 tax year, before the passage of the Tax Cuts and Jobs Act (TCJA).

For example, here are a few New York itemized tax deductions that are different from the current (2023) federal tax rules:

• Home mortgage interest and home equity interest: You can deduct these types of interest on your New York taxes based on the federal rules from tax year 2017.
• Job expenses and miscellaneous deductions: New York allows you to deduct certain expenses like travel, gifts, and car-related costs that you paid for as part of your job. (The feds no longer allow this deduction.)
• Medical and dental expenses: The IRS lets you deduct qualifying medical and dental expenses for amounts greater than 7.5% of your federal adjusted gross income (AGI). New York lets you deduct a smaller amount of these healthcare costs -- you can only deduct the portion that is larger than 10% of your federal AGI.
• Casualty and theft losses: The IRS only lets federal taxpayers take a deduction for losses suffered in federally-declared disasters. New York state lets people take itemized deductions for a wider range of casualty and theft losses, even if your unfortunate experience wasn't part of a major disaster that received a federal declaration.

One of the only major New York itemized tax deductions that follows the same rules as federal taxes for 2023 is gifts to charity. You can deduct charitable contributions on your New York tax return in the same way that you would for your federal return.

Get familiar with which set of rules are required for your itemized deductions before you file your New York tax return.

4. New York tax credits

New York is known for being a relatively "high-tax" state with state income tax as well as local real estate taxes. But the Empire State also offers some helpful New York tax credits that can help you reduce your New York tax bill. Here are a few:

Child and dependent care credit

If you pay for daycare in New York, you might qualify for this state tax credit. The rules are based on whether you qualify for the (similar) federal child and dependent care credit.

Empire State child tax credit

To qualify, your federal adjusted gross income (AGI) must be $110,000 or less (married couples filing jointly), or $75,000 or less for single filers. The amount of the Empire State child tax credit is 33% of the qualifying parent's federal Child Tax Credit, or $100 per qualifying child -- whichever amount is greater.

Green tax credits

New York state offers several tax credits for eco-friendly investments in your home or heating system, such as a Solar Energy System Equipment Credit that's worth up to $5,000.

School Tax Relief (STAR) credit

The STAR credit helps New York homeowners get property tax relief, as long as their income is under $500,000 and they live in their home as a primary residence. People age 65 and older with incomes of $98,700 or less can get an enhanced STAR credit.

Learn more at the New York Department of Taxation and Finance website.

Bottom line

Before you file your New York taxes, make sure you have a clear understanding of which state-level deductions and tax credits you might be able to get. Even in a "high-tax state," the best tax software can help you reduce your tax bill.