Here's What Happens When You Don't File Your New York State Taxes

Just as it's sometimes possible to drop the ball on filing your federal taxes, so too might you inevitably drop the ball on your state taxes. But if you're a New York resident, you should know that the consequences there could be pretty dire. So if you're sitting on an old tax return you know you need to submit, don't just ignore the problem.

You don't want to break the law

There's a big difference between being late with a New York State tax return and simply blowing it off. If you don't file a return at all, you could be charged with criminal tax evasion and face costly fines.

You're generally better off filing your state tax return and not paying your associated bill than not filing at all. If you file and don't pay because you don't have money in your checking account to do so, you'll incur interest and penalties on the sum you owe. But failing to file a tax return can be deemed a felony under New York law.

Being late will cost you

If you're late filing a New York State tax return, at that point, you're not necessarily looking at criminal charges. But you may be looking at costly penalties.

Now, one thing you should know is that you can request a tax extension for your New York State return, just as you can request one for a federal return. Doing so could help you avoid a failure-to-file penalty.

Otherwise, that penalty is worth 5% of the amount of state tax you owe per month or partial month your return is late. If your return is more than 60 days late, you're looking at a minimum penalty of $100 unless you owe less than that based on your return. In that case, you'll pay the smaller of the two.

Meanwhile, if you're late paying your state tax bill, you'll be assessed a penalty of 0.5% of your unpaid debt per month or partial month you owe that money. That's on top of interest.

As you can see, the penalty for failing to file your state tax return is higher than the penalty for not paying your bill. So even if you can't pay your state tax bill, at least file your return.

Do you need a tax lawyer for an old state return you never filed?

If you're a few weeks or even months late in filing your New York State tax return, you may want to consult a tax professional. But you may not need to enlist the help of an attorney. However, if you have a years-long overdue state tax return and an associated tax payment that's years overdue, that's a different story.

Basically, any time you're at risk of being charged with a tax crime, it's a good idea to consult a tax attorney. If you have an accountant and aren't sure whether you need further help, ask them. They'll be able to tell you if the issue at hand is out of their realm and if it pays to seek legal advice.

All told, whether you're talking about a federal tax return or a state tax return, it's best to file on time. Being late could have consequences you'd probably much rather avoid.