Taxes State Taxes New York City Income Tax—Rates and Available Credits Tax Rates, Tax Credits, and Filing Information for NYC By Tonya Moreno, CPA Tonya Moreno, CPA Tonya Moreno is a licensed CPA with about 15 years of diversified accounting, tax, and management experience. She is an expert in the field who has worked as a tax accountant for many large, multi-state corporations. She not only has experience in preparing state and federal tax returns, but has also dealt with complex tax issues with large amounts of money at stake. Today, Tonya serves as the chief financial officer of Maslonka Powerline Services in Spokane, Washington. learn about our editorial policies Updated on October 27, 2022 Reviewed by David Kindness Reviewed by David Kindness David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning. David has helped thousands of clients improve their accounting and financial systems, create budgets, and minimize their taxes. learn about our financial review board Fact checked by Sarah Fisher Fact checked by Sarah Fisher Sarah Fisher is an associate editor at The Balance with two years of personal finance and business writing experience. She has written about personal finance for SmartAsset, and has held internships at the Consumer Financial Protection Bureau and Senator Kirsten Gillibrand's office. learn about our editorial policies In This Article View All In This Article Who Has to Pay NYC Income Tax? New York City Income Tax Rates New York City Income Tax Deductions New York City Income Tax Credits Filing Your NYC Return Frequently Asked Questions (FAQs) Photo: Portra / Getty Images If you live or work in New York City, you'll need to pay income tax. Your New York City tax rate will be 3.078%, 3.762%, 3.819%, or 3.876%, depending on your filing status and taxable income. New York City is one of just a few cities in the U.S. that has a personal income tax. The New York City tax is calculated and paid on the New York State income tax return. New York City's tax code doesn't include any deductions, but the city does offer some credits of its own, separate from those the state offers. Key Takeaways Everyone who lives or earns income in New York City is liable for the NYC income tax, but those who live in the city only part of the year can calculate their tax based on the number of days they resided there.NYC offers several tax credits, and you can claim some at both the state and city levels.You'll file your New York City tax return along with your state return. Who Must Pay New York City Income Tax? Every income-earning individual, estate, and trust residing or located in New York City must pay the city's personal income tax. Taxpayers who live in NYC for only part of the year can calculate their tax based on the number of days they resided there. New York City government employees who were hired on or after January 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 resided there. Note The city tax is in addition to any income tax you might owe the state of New York. New York City Income Tax Rates New York City has four tax brackets ranging from 3.078% to 3.876%. Rates kick in at different income levels, depending on your filing status. The lowest rate applies to single and married taxpayers who file separate returns on incomes of up to $12,000 as of the tax year 2021, the return you'll file in 2022. Those who are married and who file joint returns qualify for the lowest rate on incomes of up to $21,600. The next tax brackets jump to 3.762%, then to 3.819%, then to 3.876%. 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, although there are income tax credits. New York City Income Tax Credits Tax credits reduce the amount of income tax that you owe. They come directly off any tax you owe 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. Note New York City offers several tax credits. They can offset what you owe the city, but they won't 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 four might be eligible to claim the Child and Dependent Care Credit. To qualify, your federal adjusted gross income (AGI) must be $30,000 or less. The credit amount can be as much as $1,733, 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 Full-year residents and part-year residents of NYC who qualify for and claim the federal Earned Income Credit may be able to 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 start at $15 to $30 for single and married filers, and go up with each dependent you have. 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 dependents on another taxpayer's federal income tax return. You can take a refundable credit of $125 if you're married, file a joint return, and have an income of $250,000 or less. All other taxpayers with incomes of $250,000 or less can receive a refundable credit of up to $63. No credit is allowed for taxpayers with incomes of more than $250,000. The NYC Enhanced Real Property Tax Credit This tax credit expired at the end of the 2019 tax year. It was offered to renters and to homeowners living in residences that weren't totally exempted from real property taxes during the tax year. To be eligible, your household income must have been less than $200,000, you must have lived in the same residence for at least six months, and been a New York City resident for the entire tax year. You would not have been eligible if you could have been claimed as a dependent on anyone else's federal tax return. Filing Your NYC Return The New York City personal income tax is filed with New York State with your state return. Forms can be found on the New York Department of Taxation and Finance website. You can file your return by mail or e-file it. Note New York City government employees must file an additional tax form: Form NYC-1127. New York City's taxes are due by April 15 in most years. They should be paid along with your New York State income tax. Frequently Asked Questions (FAQs) What is the NYC sales tax? NYC sales tax varies depending on the item that's being purchased. Clothing and footwear under $110 are exempt from NYC sales tax. Sales tax on most other items and services is 4.5%. The city charges a 10.375% tax and an additional 8% surtax on parking, garaging, and storing vehicles for a total tax of 18.375%. There's a Manhattan Resident Parking Tax exemption from the 8% surtax. What is tax abatement in NYC? A tax abatement is a tax break on property or business taxes. Owners of co-ops and condos in NYC who meet certain requirements can qualify to have their property taxes reduced. The requirements include using the co-op or condo as a primary residence, not owning more than three residential units in any one development (one of which is your primary residence), and not being part of the Urban Development Action Area Program. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. New York State Department of Taxation and Finance. "New York City Tax Rate Schedule." New York State Department of Taxation and Finance. "Income Tax Definitions." New York City Department of Finance. "2020 NYC-1127 Form," Page 3. New York State Department of Taxation and Finance. "Instructions for Form IT-2105," Pages 8, 10. New York State Department of Taxation and Finance. "2021 Tax Tables." New York State Department of Taxation and Finance. "New York City Credits." New York State Department of Taxation and Finance. "Earned Income Credit (New York State)." New York State Department of Taxation and Finance. "Instructions for Form IT-201 Full-Year Resident Income Tax Return," Page 22. NYC Department of Finance. "New York State Sales and Use Tax." NYC Department of Finance. "Cooperative and Condominium Tax Abatement."