Recently, New York legislators and Gov. Andrew Cuomo have reached an agreement on New York’s 2021-2022 budget. It reflects tax increases for the “ultra wealthy” and corporations, with the continued implementation of middle-class tax cuts.

Married and Individual Tax Rates

The 2021 tax rate for married filing joint taxpayers is 5.97% for the $43,000-to-$161,550 income bracket and 6.33% for the $161,550-to-$323,200 bracket. The rate climbs from 8.82% to 9.65% for individuals with income over $1,077,550, but not over $5 million, and joint filers with income over $2,155,350, but not over $5 million. Individuals with income between $5 million and $25 million are subject to a new rate of 10.3%, and, for income over $25 million, the new rate is 10.9%.

Corporation Tax Rates

Effective for tax years starting on or after Jan.1, 2021, the state is increasing its corporate franchise tax rate from 6.5% to 7.25%. However, the budget lets stand the current 6.5% tax rate for companies with a business income base of $5 million or less. The increased tax rate expires on Jan. 1, 2024.

The budget restores the capital base tax, which was eliminated in 2021. The tax rate is 0.1875%. Co-ops, manufacturers and small companies are exempt. The budget includes a new “restaurant return-to-work tax credit program” for eligible businesses. (L. 2021, S2509; L. 2021, A3009, effective when passed, or as otherwise stated)

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The materials contained herein are intended for educational and informational purposes only and do not constitute tax or legal advice. Readers are responsible for obtaining such advice from their tax and legal counsel.