Everyone must pay federal capital gains taxes on profits from investments or sales of capital assets, and if you’re a New York resident, you’ll have to pay state and possibly local capital gains taxes, as well. The amount of capital gains taxes owed depends on your income tax bracket and whether you held the investment for the short- or long-term. While the federal government taxes capital gains at a lower rate than ordinary income, most states tax capital gains at the ordinary income rate, the same as wages, and New York is no exception.
The stare of New York enforces capital gains taxes for all residents.
New York State Capital Gains Tax is the Same as Ordinary Income Tax
Short-term capital gains refer to assets held less than one year, and for federal purposes are taxed at ordinary income rates. For long-term capital gains on assets held more than one year, taxes are assessed at 0 percent, 15 percent and 20 percent, depending on the taxpayer's top income tax bracket.
New York State does not have a separate long-term capital gains rate like the federal government. Instead, New York taxes capital gains, whether long-term or short-term, as ordinary income. If you live in New York City, you will also have to pay city income tax on the gains.
NYC Tax Brackets for 2017
New York City residents pay additional capital gains and other taxes. This makes their combined state and local income tax rate a whopping at 12.7 percent for 2017. The City has yet to make the 2018 information available.
For single filers, the following rates applied in 2017:
- Up to $12,000 AGI: 3.078 percent
- $12,000 to $25,000: $ 369 plus 3.762 percent of the excess over $12,000
- $25,000 to $50,000: $858 plus 3.819 percent of the excess over $25,000
- $50,000 and up: $1,813 plus 3.876 percent of the excess over $50,000
For married couples filing jointly, the following 2017 New York City tax rates applied:
- Up to $21,600 AGI: 3.078 percent
- $21,600 to $45,000: $665 plus 3.762 percent of the excess over $21,600
- $45,000 to $90,000: $1,545 plus 3.819 percent of the excess over $45,000
- $90,000 and up: $3,264 plus 3.876 percent of the excess over $90,000
New York State Income Tax Rate 2017 Brackets
There are eight marginal tax brackets in the state of New York, which range from 4 percent to 8.82 percent, with additional amounts charged for all but the lowest bracket. For tax year 2017, the top marginal capital gains tax rate in New York is 31.5 percent, the second highest in the nation after California. The State has yet to release its tax bracket information for 2018.
These are the rates for single filers in 2017:
- Up to $8,500 in adjusted gross income (AGI) : 4 percent
- $8,500 to $11,700: 4.5 percent plus $340.
- $11,700 to $13,900: 5.25 percent plus $484.
- $13,900 to $21,400: 5.9 percent plus $599.50
- $21,400 to $80,650: 6.45 percent plus $1,042.
- $80,650 to $215,400: 6.65 percent plus $4,863.63
- $215,400 to $1,077,550: 6.85 percent plus $13,824.50
- Over $1,077,550: 8.82 percent plus $72,881.78
These are the rates for married couples filing jointly in 2017:
- Up to $17,150 in adjusted gross income: 4 percent
- $17,150 to $23,600: 4.5 percent plus $686
- $23,600 to $27,900: 5.25 percent plus $976.25
- $27,900 to $43,000: 5.9 percent plus $1,202
- $43,000 to $161,550: 6.45 percent plus $2,092.90
- $161,550 to $323,200: 6.65 percent plus $9,739.38
- $323,200 to $2,155,350: 6.85 percent plus $20,489.10
- Over $2,155,350: 8.82 percent plus $145,991.38
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.