Barbara Katsos has practiced law in New York for more than 20 years. The owner of the Law Offices of Barbara H. Katsos in New York, NY, she manages firm operations and works directly with clients. Through her office, Dr. Katsos and her team handle cases involving trusts, wills, and estate matters, such as estate taxes.
In the State of New York, a person’s property is eligible to be taxed if their total estate exceeds $5.25 million. This amount is scheduled to increase in 2019, at which point it will match the federal requirement of exceeding $5.49 million to be eligible for taxation.
When calculating this amount, the state takes into consideration a person’s real estate, cars, cash, bank accounts, and securities. If any of this property is jointly owned, the state still counts 100 percent of its value when calculating estate sizes. Further, depending on how they’ve been structured, the death benefit of a life insurance policy may also be taxable.
The estate tax rate in New York is lower than the federal estate tax rate. At the federal level, qualifying estates are taxed at a 40 percent rate. This drops to between 5 percent and 16 percent at the state level. However, unlike some states that only tax the amount that is over the exempt amount, New York taxes the entire value. As a result, the actual tax may seem higher despite the lower rate.
Further, estates are subject to both a state and federal taxes if they are above the exemption amounts. The federal government may allow estates to deduct state taxes from the federal tax.