For many new immigrants, the tax system in the United States can be challenging, and how to file taxes correctly has become a worry for many people. For residents living in New York City, in addition to paying federal personal income tax and state personal income tax, they also have to pay personal income tax to the city. Multi-level taxation makes New York City one of the cities with the heaviest tax burden in the U.S. Misdeclaring taxes can result in fines and civil or criminal penalties in tax fraud or evasion cases.
This article guides New York City residents to file personal income tax correctly and lists tax filing materials. This article is part of the Documented’s Guide to Resources for Chinese Immigrants in NYC.
Who has to pay NYC personal income tax?
All New York City residents are subject to New York City personal income tax, regardless of where their income comes from. Non-residents of New York City are not subject to city personal income tax. You are a New York City resident if you meet the following two conditions: your residence is in New York City; or you have a permanent residence in New York City and reside in New York City for at least 184 days during the tax year.
Also Read: NYC Free Tax Prep and Where Immigrants Can Get Help Filing
What is a tax year?
As defined by the IRS, you must calculate your taxable income based on the tax year. A “tax year” is the accounting period for recording and reporting the income and expenses for a year. The annual accounting period does not include short tax years. You can choose the following periods as your tax year:
- Calendar Year – 12 consecutive months beginning January 1 and ending December 31.
- Fiscal Year – 12 consecutive months ending on the last day of any month except December. A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month.
What is a tax bracket and how is tax calculated?
The United States uses a progressive tax system, which divides your income into different portions according to the corresponding standards. Each portion of your taxable income is taxed at different corresponding rates, and the total tax amount is the sum of the taxes payable on each portion. For example, if you are a single earning $60,000 annually. In 2022, your federal tax liability would be calculated as follows: a lowest rate of 10% for the first $10,275 of your taxable income. The portion of your income that falls between $10,275 and $41,776 would be taxed at a higher rate of 12%, and the remaining portion of your income that falls between $41,776 and $89,076 would be taxed at a rate of 22%. Other higher-income earners follow the same method until the final portion of your taxable income is calculated.
A progressive tax system increases tax rates as taxable income increases, with the effect that high-income taxpayers typically pay taxes at higher rates than low-income taxpayers.
List of individual income tax rates for New York City residents
- Federal Individual Income Tax: For the 2022 tax year and the returns you file in 2023, the IRS has set seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Your tax bracket depends on your filing status and taxable income. Click here to see more details.
- New York State Personal Income Tax: For the 2022 tax year and the returns you file in 2023, there are nine income tax brackets in New York State: 4%, 4.5%, 5.25%, 5.85%, 6.25%, 6.85%, 9.65%, 10.3% and 10.9%. Your tax bracket depends on your filing status and taxable income. Residency status also determines what is taxable. Click here to see more details.
- New York City Personal Income Tax: For the 2022 tax year and the returns you file in 2023, New York City income tax is divided into four brackets: 3.078%, 3.762%, 3.819%, and 3.876%. Your tax bracket depends on your filing status and taxable income. Click here to see more details.
Important Tax Dates
April 18, 2023: Deadline to file 2022 New York State income tax returns and pay any amounts you owe without interest or penalty. If you are unable to file by this date, you can extend the deadline automatically by six months to October 16, 2023 by filing Form IT‑370. You must file Form IT-370 along with any tax owed and due on or before the tax filing deadline (April 18, 2023). This is a list of important tax dates.
June 15, 2023: If you are eligible to file a federal income tax return on June 15, 2023, this date is also the deadline to file your 2022 New York State income tax return.
Eligible persons include: U.S. citizens or non-citizen residents who live outside the U.S. and Puerto Rico and have their principal place of business or post of duty outside the U.S. and Puerto Rico, or you are serving in the military outside the U.S. and Puerto Rico when your 2022 tax filing period ends. The deadlines for paying New York State, New York City, and Yonkers income taxes and any New York State or local sales or use taxes will also be automatically extended for those above. For more information on extended filing deadlines for military personnel, see Publication 361, New York State Income Tax Information for Military Personnel and Veterans.
October 16, 2023: If you filed Form IT-370 for an automatic six-month extension of personal tax filing time and paid any taxes you owe, you must file your 2022 income tax return by October 16, 2023. Otherwise, you will be charged penalties and interest starting from the original deadline of April 18, 2023.
April 18, 2023; June 15, 2023; September 15, 2023; January 16, 2024: These are the 2023 estimated tax due dates. In general, if you expect to still owe at least $300 of New York State, New York City, or Yonkers income tax after deducting taxes already prepaid or tax credits for which you are eligible, or any amount of the metropolitan commuter transportation mobility tax, you must pay the estimated tax by the above date.
Tax Preparation Checklist
When you file tax by yourself or ask a professional to do it for you, please prepare the following documents:
- Primary documents: driver’s license, last year’s tax return, bank account information, estimated tax payments, childcare expenses, education accounts (529 Accounts, Form 1099-Q), student expenses paid with 529, Advance Child Tax Credit (Letter 6419).
- Sources of income: salary (W2), self-employment/part-time job (1099-NEC & work expenses), rental income and expenses, unemployment (1099-G), partner’s share of income (K-1), pension/IRA income (1099-R), Social Security (SSA-1099), interest/dividends (1099-INT, 1099-DIV), sales of stocks (1099-B), sale of property (1099-S), Health Savings Account (1099 SA), cryptocurrency/Bitcoin, gambling income (W-2 G), cancellation of debt (1099-C).
- Potential deductions and credits: medical expenses, student loans/tuition fees and other educational expenses (1098-E, 1098-T), property taxes, Roth IRA/ traditional/SEP IRA, mortgage interest (1098), charitable donation, gambling losses, Health Savings Accounts contribution (HSA).
How to file taxes
You can use formal tax filings software such as TurboTax or H&R Block to file tax returns online or hire a qualified accountant to file taxes for you. If you meet specific income criteria, you may also be eligible for free New York City tax filing services (NYC Free Tax Prep). For more information, please read our New York City Free Tax Prep Programs with Chinese Language Services.
Translation from Chinese into English provided by Sicheng Wan.