In New York, one address or business structure can add several layers of tax: state income tax, a New York City or Yonkers tax, a commuter-district payroll tax and a separate city business tax. If you live, work or own property in New York, or commute in from New Jersey or Connecticut, the layers matter more than any single rate. This is general information for tax year 2025 and 2026.
State, city and Yonkers income taxes
For 2025 the state schedule has nine brackets. A single filer reaches 6.85% above $215,400 and 9.65% above $1,077,550. Confirm the 2026 schedule before projecting. New York does not tax Social Security benefits (the taxable amount is subtracted) and a non-government pension or annuity qualifies for an exclusion of up to $20,000 once you are 59 and a half.
New York City taxes residents of its five boroughs separately, at 3.078% to 3.876% for 2025, reported on Form IT-201. Nonresidents do not owe it. Yonkers residents pay a surcharge of 16.75% of their state tax, while people who live elsewhere but earn wages in Yonkers file Form Y-203. A mid-year move into or out of either city requires Form IT-360.1.
You are a resident if New York is your domicile, or if you keep a permanent place of abode and spend 184 days or more in the state, counting any part of a day.
Living elsewhere, working in New York
Nonresidents and part-year residents file Form IT-203 and pay tax on New York-source income, such as wages for work done in the state. The telecommuting rule catches many commuters: if your primary office is in New York, days you work from home in another state count as New York days unless your employer has a bona fide employer office at that location.
New Jersey and Connecticut residents typically claim a credit in their home state for New York tax, though each state sets its own limits. See our Edison, NJ and New York metro pages, and H-1B and visa holders for visa-related questions.
Business owners: PTET, city taxes and MCTMT
Pass-through entity tax. Partnerships and New York S corporations may elect the optional PTET online between January 1 and March 15 each year. Owners who pay New York personal income tax claim a credit on Form IT-653. Compare it with the federal SALT deduction limit.
New York City business taxes.
- The unincorporated business tax is 4% of income allocated to the city for partnerships, sole proprietors and single-member LLCs, with a partial credit against resident city income tax (NYC Finance).
- NYC ignores S corporation elections, so S corporations pay the general corporation tax rather than the business corporation tax, whose business income rate is 8.85% for most taxpayers.
- The commercial rent tax reaches tenants in Manhattan south of 96th Street with annual rent of at least $250,000, at an effective 3.9% before small-business credits.
MCTMT. The commuter-district tax covers New York City (Zone 1) and Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester (Zone 2). For 2025, self-employed people and partners whose net earnings in a zone exceed $50,000 owe 0.60% in Zone 1 or 0.34% in Zone 2. Employers owe it once quarterly covered payroll exceeds $312,500, at tiered rates for quarters from July 1, 2025 that top out at 0.895% in Zone 1 and 0.635% in Zone 2. Form MTA-305 is due the month after each quarter ends (April 30, July 31, October 31 and January 31).
Payroll, leave and sick pay
New York employers generally report withholding and unemployment insurance together on Form NYS-45, due the last day of the month after each quarter. The UI wage base was $12,800 for 2025 and is $17,600 for 2026, adjusting each January after that under a formula tied to the state average wage. See our guides to state unemployment insurance and paid family leave.
For 2026, Paid Family Leave is funded by an employee contribution of 0.432% of gross wages, capped at $411.91 a year, with a maximum weekly benefit of $1,228.53. Paid sick leave is up to 56 hours for employers with 100 or more employees and 40 hours for smaller ones, with the smallest employers' leave paid only above $1 million of net income. For city rules, see local payroll taxes.
Sales tax, property tax and LLC filings
The state sales tax is currently 4%, and local rates are added by county or city; areas in the commuter district include a 3/8% portion. Use the reporting codes in Publication 718 (effective March 1, 2025), not ZIP codes. New York City property is taxed in four classes, and the 2026 rates run from 10.848% (Class 4) to 19.843% (Class 1).
A new New York LLC must publish notice once a week for six successive weeks in two newspapers within 120 days or its authority to do business is suspended; the certificate of publication has a $50 filing fee. LLCs and corporations also file a biennial statement with the Department of State. See business formation.
How we can help New York clients
We prepare IT-201 and IT-203 returns, model the PTET election, check how remote-work days are allocated, and set up NYS-45 and MCTMT reporting. Illinois owners with New York activity can coordinate with their Illinois return and our multi-state tax service.
Frequently asked questions
Do I pay New York City income tax if I work in Manhattan but live in New Jersey?
No. City income tax applies to residents. You file Form IT-203 on your New York-source wages and claim any credit on your home-state return.
Does New York tax Social Security?
No, the taxable amount of Social Security benefits is subtracted from New York adjusted gross income.
Should my S corporation elect PTET?
The election is made each year by March 15 and becomes irrevocable once the first estimated payment is due. Compare it with owner-level payment first.
Is the LLC publication requirement optional?
No. It is required within 120 days of formation, and failure suspends the LLC's authority to do business.
Official sources
- NY Tax Department: 2025 Form IT-201 instructions
- NY Tax Department: Nonresident and telecommuting FAQs
- NY Tax Department: Pass-through entity tax
- NY Tax Department: MCTMT for employers
- NY Tax Department: Form NYS-45 instructions
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.