Tax Increases and SALT Relief Come Out of New York Budget Finalization
In the early morning hours of Tuesday, April 7, 2021, New York state leaders agreed on a $212 billion budget that includes increased tax rates for both large businesses and the wealthy in New York State. Included in this plan, is a temporary tax increase and two new tax brackets that have been created through this plan. Tax filers who earn between $5 and $25 million will see a tax rate of 10.3% and tax filers that earn more than $25 million will see a new top rate of 10.9% with the new rates set to expire in 2027. The plan also includes a way to circumvent the current $10,000 State and Local Tax (SALT) deduction cap that had been created in 2017.
|Joint filers earning $2.2 - $5 million/Individuals earning $1.1 - $5 million||9.65%|
|Joint or individual filers earning $5 - $25 million||10.3%|
|Joint or individual filers earning more than $25 million||10.9%|
The COVID-19 pandemic and the state’s budget shortage complicated negotiations.
Many questions remain as to the implications of the passing of New York's new budget. Stay tuned to Lumsden McCormick, where we will share additional clarification as it is made available.