New York estate tax laws only conform to the federal estate tax laws that were enacted before July 22, 1998, so New York's laws do not conform to the changes that were enacted by the federal Economic Growth and Tax Relief Reconciliation Act of 2001 (or "EGTRRA"). Thus, for New York residents and nonresidents who own real estate or tangible personal property located in New York and whose deaths occur on or after January 1, 2004, the following rules apply:
- For a New York resident, the estate must file a New York State Estate Tax Return, Form ET-706, if the total of the federal gross estate, plus the federal adjusted taxable gifts and specific exemption, exceeds $1,000,000.
- For a nonresident, the estate must file Form ET-706 if the estate includes real or tangible personal property having an actual situs in New York and the gross estate, plus federal adjusted taxable gifts and specific exemption, exceeds $1,000,000. The estate of a nonresident must also complete Form ET-141, New York State Estate Tax Domicile Affidavit.
- Form ET-706 must be filed and any tax due must be paid within nine months after the decedent's date of death unless an extension of time to file the return and pay the tax is received.
- An extension of time to pay the estate tax for up to four years from the date of death may be granted if it's established that payment of any part of the tax within nine months from the date of death would result in undue hardship to the estate, but annual installments may be required. Extensions of time to file the return, pay the tax, or both, are requested on Form ET-133.
- The starting point for Form ET-706 is the federal estate tax return, IRS Form 706. Thus, a completed IRS Form 706 (or 706-NA for a noncitizen, nonresident of the United States) with all schedules and supporting documents must be submitted with New York Form ET-706.
- The tax rate is a progressive rate that maxes out at 16% for the amount above $10,040,000.
This information is courtesy of the New York State Department of Taxation and Finance.
The bottom line - if you are a New York resident and your estate is passing to someone other than your spouse or to an AB Trust for the benefit of your spouse and the value is $1,000,000 or more, or if you are a nonresident who owns real estate and/or tangible personal property located in New York and your estate is valued at $1,000,000 or more, then your estate may owe a New York estate tax. Up next, North Carolina estate taxes.
- Overview of New York Estate Tax Laws
- Understanding Death, Estate and Inheritance Taxes
- State Estate Tax Chart
- Understanding the State Estate Tax Exemption Trap
- When is a Federal Estate Tax Return Required to Be Filed?
- How to Calculate Your Federal Estate Tax Liability
- How to Reduce or Even Eliminate Your Estate Tax Bill