July 10, 2020
New York will continue with incrementally reducing certain state income tax rates that began in 2018
In a news release regarding the recently enacted New York State FY 2021 budget legislation, Governor Cuomo announced that despite the financial drain of the COVID-19 emergency on the state's budget, the personal income tax rate reductions that began in 2018 under Chapter 60 of the Laws of 2016 (Part TT) will continue. (New York Department of Taxation and Finance June 2016 Summary of SFY 2016—2017 provisions.)
In his news release, the governor stated:
This year's Enacted Budget continues to lower Personal Income Tax rates for middle-class New Yorkers. In 2020, the third year of the multi-year tax cuts enacted in 2016, income tax rates have been lowered from 6.85 percent to 6.09 percent for taxpayers in the $43,000-$161,550 income bracket, and to 6.41 percent in the $161,550-$323,200 income bracket. These cuts are expected to save 4.7 million New Yorkers over $1.8 billion this year.
Furthermore, income tax rates will continue to drop to 5.5 percent for taxpayers in the $27,900-$161,550 tax bracket and 6 percent in the $161,550-$323,200 bracket. When the cuts are fully phased in, middle class taxpayers will have received an income tax rate cut up to 20 percent, amounting to a projected $4.2 billion in annual savings for six million filers by 2025. As the new rates phase in, they will be the State's lowest middle-class tax rates in more than 70 years.?
As we reported, the 2020 New York State and City of Yonkers personal income tax rate schedules were revised for the third year in a row to reflect the income tax rate reductions enacted under Chapter 60. The law continues to be phased in beginning for tax year 2018 and ending in tax year 2025, after which point the new income tax rates will be made permanent.
When fully phased in:
See the Department's website for more information on state withholding.
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