New York City has three separate income taxes: city, state, and federal

When you earn money in New York City, you pay tax to three different governments. The federal government takes a percentage based on your total income nationwide. The New York State government takes another percentage. The City of New York takes a third percentage on top of that. Each one calculates its own rate and collects its own money.

The total tax you owe depends on how much you earn, your filing status (single, married, head of household), and whether you have dependents or other deductions. A person earning $50,000 in New York City pays a different total percentage than someone earning $150,000, because all three tax systems use progressive rates — meaning higher earners pay a higher percentage.

Your employer usually withholds these taxes from each paycheck automatically. If you are self-employed, you pay estimated taxes four times per year. Either way, you file a return each year to settle what you actually owe against what was already withheld.

Key Takeaways

  • New York City residents pay federal income tax, New York State income tax, and New York City income tax all at once — the total can range from roughly 30 to 50 percent of income depending on what you earn.
  • New York State and City both use progressive tax brackets, meaning higher earners pay a higher percentage, and the rates change each year.
  • Your employer withholds these taxes from your paycheck, but you must file a return each year to confirm the amount withheld was correct.
  • Self-employed people and business owners pay estimated taxes quarterly and owe self-employment tax on top of income tax.
  • Property owners, renters, and sales tax payers face additional taxes beyond income tax.

Federal income tax rates for 2024

The federal government uses tax brackets that change each year. For 2024, a single person pays 10 percent on the first roughly $11,600 of income, then 12 percent on income between $11,600 and $47,150, then 22 percent on income between $47,150 and $100,525, and so on up to 37 percent on income over $578,100. If you are married filing jointly, the brackets are wider — you pay 10 percent on the first roughly $23,200, then 12 percent on income between $23,200 and $94,300, and so on.

These are marginal rates, meaning you do not pay the top rate on all your income — you pay the lower rate on the lower portion and the higher rate only on the portion that falls into that bracket. A single person earning $60,000 does not pay 22 percent on all $60,000; they pay 10 percent on the first $11,600, 12 percent on the next $35,550, and 22 percent only on the remaining $12,850.

The federal government also allows a standard deduction — an amount you can subtract from your income before calculating tax. For 2024, the standard deduction is roughly $14,600 for a single person and $29,200 for married couples filing jointly. Many people take the standard deduction rather than itemizing deductions.

New York State income tax rates for 2024

New York State uses its own tax brackets separate from federal tax. For 2024, a single person pays 4 percent on the first roughly $11,200 of income, then 4.5 percent on income between $11,200 and $13,900, then 5.85 percent on income between $13,900 and $21,400, and the rate continues to climb up to 10.9 percent on income over $1,097,350. Married couples filing jointly have wider brackets but pay the same rates at higher income levels.

New York State also allows you to subtract a standard deduction before calculating tax. For 2024, the standard deduction is roughly $8,000 for a single person and $16,000 for married couples filing jointly. New York State's standard deduction is smaller than the federal one, so some people end up paying state tax on income that is not subject to federal tax.

New York State offers a property tax credit and a child and dependent care credit that can reduce your state tax bill. You claim these on your state return, not your federal return.

New York City income tax rates for 2024

New York City adds its own income tax on top of state and federal tax. The city uses four tax brackets. For 2024, a single person pays 3.876 percent on the first roughly $15,000 of income, then 4.415 percent on income between $15,000 and $30,000, then 4.731 percent on income between $30,000 and $42,000, and 4.914 percent on income over $42,000. Married couples filing jointly have higher bracket thresholds but pay the same rates.

New York City does not allow a standard deduction the way federal and state do. Instead, the city allows you to subtract a personal exemption — roughly $3,100 for a single person and $6,200 for married couples filing jointly in 2024. After you subtract this exemption, you calculate city tax on the remaining amount.

The city also offers a property tax abatement for certain homeowners and a credit for taxes paid to other cities if you work outside New York City but live within it.

What your total tax burden looks like

A single person earning $60,000 in New York City in 2024 would owe roughly $9,000 to $10,000 in combined federal, state, and city income tax — about 15 to 17 percent of their gross income. A single person earning $150,000 would owe roughly $45,000 to $50,000 — about 30 to 33 percent. A single person earning $500,000 would owe roughly $200,000 to $220,000 — about 40 to 44 percent. These are rough estimates and do not account for credits, deductions, or other adjustments.

The reason the percentage climbs is that all three tax systems use progressive brackets. As your income rises, you move into higher brackets at each level — federal, state, and city — so your overall rate increases. This is why people often say New York City has one of the highest tax burdens in the country.

Your actual tax bill also depends on whether you have dependents, own a home, pay student loan interest, make charitable donations, or have other sources of income like capital gains or business income. These factors can lower your taxable income and reduce what you owe.

Self-employment tax and business income

If you are self-employed or own a business, you pay self-employment tax in addition to income tax. Self-employment tax covers Social Security and Medicare and is roughly 15.3 percent of your net business income. You pay half of this directly and can deduct the other half when calculating your income tax.

Self-employed people must file quarterly estimated tax payments to the federal government, New York State, and New York City. These payments are due on April 15, June 15, September 15, and January 15 of the following year. If you do not pay enough in estimated taxes throughout the year, you may owe a penalty when you file your annual return.

You can deduct business expenses — rent, supplies, equipment, professional services — from your gross business income before calculating tax. Keeping good records of these expenses is important because they reduce your taxable income and lower your overall tax bill.

Sales tax, property tax, and other taxes in New York City

Income tax is not the only tax you pay in New York City. Sales tax in the city is 8.875 percent on most purchases — you pay this when you buy goods or certain services. Property tax is owed by homeowners and is based on the assessed value of the property; renters do not pay property tax directly, but landlords pass the cost along in rent. Payroll tax is paid by employers on wages, though you do not see this on your paycheck.

The city also has taxes on hotel rooms (14.75 percent), parking (14.75 percent in some areas), and cigarettes and alcohol. These are smaller for most people but add up if you use these services regularly.

Frequently Asked Questions

Do I have to file a New York City tax return if I work in the city but live outside it?

No. You file a New York City return only if you live in the city, regardless of where you work. If you work in the city but live in New Jersey or another state, you file that state's return instead. However, you still owe federal income tax on all income you earn anywhere.

What is the difference between a tax bracket and my actual tax rate?

A tax bracket is the rate you pay on income that falls within a certain range. Your actual tax rate — called your effective tax rate — is the total tax you owe divided by your total income. If you earn $60,000 and owe $9,000 in tax, your effective rate is 15 percent, even though you are in a 22 percent federal bracket.

Can I reduce my New York City income tax by claiming deductions?

Federal and state deductions reduce your taxable income and lower your tax bill at all three levels. New York City does not allow itemized deductions the way federal and state do, but you can claim the personal exemption. Credits — like the child tax credit — reduce your tax bill directly and often apply to city tax as well.

When do I file my New York City tax return?

You file your federal, state, and city returns together by April 15 each year for the previous year's income. If you need more time, you can request an extension, which gives you until October 15. If you are self-employed, you may owe estimated taxes on a different schedule.

What happens if I do not pay my New York City income tax?

The city will send you notices and may charge penalties and interest on the unpaid amount. If you do not respond, the city can place a lien on your property, garnish your wages, or take other collection action. If you owe tax, contact the Department of Finance to set up a payment plan.