New York has the fourth-highest state income tax rate in the country at 10.9%, and New York City layers on an additional 3.078-3.876%. If you work in tech in New York -- Wall Street fintech, Manhattan startups, or Brooklyn's tech corridor -- your state and local tax burden can exceed 14% before a single federal dollar is owed.
This guide covers the complete New York income tax picture for 2026: brackets for all filing statuses, the NYC income tax, supplemental withholding rates, and how NY taxes RSUs, ISOs, and other equity compensation.
New York State Tax Brackets (2025 Tax Year)
A critical fact about New York: NY does NOT index tax brackets for inflation. Unlike federal brackets (which adjust annually), New York's brackets stay the same year after year unless the legislature explicitly changes them. The brackets below are the same as 2024.
Single / Married Filing Separately
| Tax Rate | Taxable Income Range |
|---|---|
| 4% | $0 -- $8,500 |
| 4.5% | $8,500 -- $11,700 |
| 5.25% | $11,700 -- $13,900 |
| 5.5% | $13,900 -- $80,650 |
| 6% | $80,650 -- $215,400 |
| 6.85% | $215,400 -- $1,077,550 |
| 9.65% | $1,077,550 -- $5,000,000 |
| 10.3% | $5,000,000 -- $25,000,000 |
| 10.9% | $25,000,000+ |
Married Filing Jointly
| Tax Rate | Taxable Income Range |
|---|---|
| 4% | $0 -- $17,150 |
| 4.5% | $17,150 -- $23,600 |
| 5.25% | $23,600 -- $27,900 |
| 5.5% | $27,900 -- $161,550 |
| 6% | $161,550 -- $323,200 |
| 6.85% | $323,200 -- $2,155,350 |
| 9.65% | $2,155,350 -- $5,000,000 |
| 10.3% | $5,000,000 -- $25,000,000 |
| 10.9% | $25,000,000+ |
No inflation indexing. Federal brackets adjust annually for inflation, gradually reducing your real tax burden over time. New York brackets stay fixed, which means inflation slowly pushes more of your income into higher brackets -- a form of stealth tax increase. These 2025 brackets are identical to 2024.
New York Standard Deduction (2025)
| Filing Status | NY Standard Deduction |
|---|---|
| Single | $8,000 |
| Married Filing Jointly | $16,050 |
| Married Filing Separately | $8,000 |
| Head of Household | $11,200 |
New York's standard deductions are more generous than California's ($8,000 vs. $5,706 for single filers) but still far below the federal amounts ($15,000 single / $30,000 MFJ).
New York City Income Tax
If you live in New York City, you pay an additional NYC income tax on top of the New York State tax. NYC has its own progressive bracket system:
| Tax Rate | Taxable Income Range (Single) |
|---|---|
| 3.078% | $0 -- $12,000 |
| 3.762% | $12,000 -- $25,000 |
| 3.819% | $25,000 -- $50,000 |
| 3.876% | $50,000+ |
The top NYC rate of 3.876% applies to all taxable income over $50,000. Combined with the state rate, a NYC resident in the 6.85% state bracket pays an effective combined state + city rate of 10.726%. High earners in the 9.65% state bracket face a combined rate of 13.526% -- rivaling California's top rate.
NYC tax is based on residency, not work location. If you live in NYC, you owe NYC income tax on all your income -- even if you work remotely or commute from another state. RSU vesting, ISO exercises, and stock sales are all subject to NYC tax for city residents.
NYC Residency Rules for Equity Compensation
New York's residency rules create unique complications for tech workers, especially those working remotely.
The 183-day rule: You're a "statutory resident" of New York if you maintain a permanent place of abode in NY and spend more than 183 days in the state during the year. This is separate from domicile -- you can be a statutory resident of NY while domiciled elsewhere.
Domicile vs. statutory resident: Domicile is where you intend to make your permanent home. Statutory residency is a separate test based on physical presence + a place of abode. You can owe NY tax under either test. Many tech workers who think they "moved" to another state but keep a NYC apartment get caught by the statutory resident test.
The "convenience of the employer" rule: This is New York's most controversial tax rule. If your employer is located in New York and you work remotely from another state, New York taxes your income as if you were working in NY -- unless the remote work is a "necessity of the employer" (e.g., the employer has no NY office for your role). This means:
- A Google employee based in NYC who works remotely from New Jersey may still owe NY tax on all income, including RSU vesting
- The burden of proof is on the taxpayer to show the remote work was necessary for the employer
- This rule has been challenged in court but remains in effect
If you moved out of NYC but still work for a NYC-based company remotely, you may still owe New York State tax on your income under the convenience rule. This applies to RSU vesting income, making it critical to understand before relocating. New Jersey, Connecticut, and several other states have challenged this rule, but New York continues to enforce it.
New York Supplemental Withholding Rate: 11.70%
New York's supplemental withholding rate is 11.70%. This is the flat rate your employer withholds on RSU vesting income, bonuses, and other supplemental wages for New York state purposes.
The Over-Withholding Problem
Here's something unusual about New York: the supplemental rate of 11.70% is higher than the marginal rate for most tech workers.
Most tech employees with income between $215,400 and $1,077,550 fall in the 6.85% bracket. But their employer withholds at 11.70% -- nearly 5% more than their actual rate.
Example: $100K RSU vest for someone in the 6.85% bracket
| Amount | |
|---|---|
| RSU vesting value | $100,000 |
| Employer withholds (11.70%) | $11,700 |
| Actual NY tax at 6.85% marginal rate | $6,850 |
| Over-withheld | $4,850 |
This means many New York tech employees get a substantial state tax refund each year from RSU vesting. The employer takes too much, and you get it back when you file.
Detailed example: $250K salary + $150K RSU vest, single filer
With $400K total income, you're in the 6.85% state bracket ($215,400-$1,077,550). The NY tax attributable to the $150K RSU income is approximately $10,275 (incremental method: total tax on $400K minus total tax on $250K). But your employer withheld $17,550 (11.70% of $150K).
| Amount | |
|---|---|
| RSU vesting value | $150,000 |
| Employer withholds (11.70%) | $17,550 |
| Actual NY tax on RSU (incremental) | ~$10,275 |
| Over-withheld (refund) | ~$7,275 |
That's $7,275 in cash flow you're lending to New York interest-free until you file. If you have predictable RSU vesting, you can adjust your W-4 to account for this and reduce over-withholding on your salary.
Why does NY set such a high supplemental rate? The 11.70% rate is designed to approximate the combined state + NYC rate for city residents in higher brackets. If you live outside NYC, you're almost certainly over-withheld. Even NYC residents in the 6.85% bracket (combined 10.726%) are somewhat over-withheld at 11.70%.
The over-withholding is only a problem in the sense that you're giving New York a free loan. But it does mean you're less likely to face a surprise state tax bill at filing time -- the opposite of the California situation.
How New York Taxes RSUs
New York taxes RSUs the same way as the federal government: as ordinary income when they vest. The full fair market value on the vesting date is included in your W-2 and subject to New York State income tax (plus NYC tax if applicable).
The withholding flow:
- RSUs vest and shares land in your brokerage account
- Your employer sells a portion to cover taxes
- NY supplemental withholding: 11.70% of the vesting value
- If you live in NYC, additional NYC withholding applies
- You receive remaining shares
The refund vs. shortfall:
- Income below $1,077,550: likely over-withheld (refund)
- Income above $1,077,550: 9.65% bracket, still somewhat over-withheld
- Income above $5,000,000: 10.3% bracket, closer to actual rate
For most tech employees, New York's aggressive supplemental withholding means you'll get money back at tax time rather than owe. Use our RSU Calculator to see your exact New York withholding situation.
For an in-depth look at how RSU withholding works across federal, state, and FICA, see our RSU tax withholding guide.
How New York Taxes ISOs
Unlike California, New York conforms to the federal treatment of ISOs. This means:
- ISO exercises are not taxed as ordinary income for NY purposes
- The bargain element (spread) on an ISO exercise is only relevant for federal AMT
- New York has no state AMT, so ISO exercises have no immediate NY tax consequence
- You only owe NY tax when you sell the shares (either as ordinary income for a disqualifying disposition or as capital gains for a qualifying disposition)
This is a significant advantage over California, where ISO exercises trigger immediate state ordinary income tax. A New York resident who exercises $200K worth of ISOs owes no NY state tax on the exercise -- they only face federal AMT.
Key difference from California:
| New York | California | |
|---|---|---|
| ISO exercise: state ordinary income tax? | No | Yes |
| ISO exercise: state AMT? | No (no state AMT) | Taxed as ordinary income instead |
| Qualifying disposition: state capital gains tax? | Yes (ordinary income rates) | Yes (ordinary income rates) |
For modeling the federal AMT impact of ISO exercises, use our ISO AMT Calculator. For more on AMT planning, see our AMT calculator guide for stock options.
New York Has No State AMT
New York does not impose a state-level Alternative Minimum Tax. This means the only AMT consideration for New York residents is at the federal level.
This is another advantage over California, which imposes a 7% state AMT. For ISO holders, it means one fewer tax to model when planning exercises.
Capital Gains in New York
New York taxes capital gains as ordinary income -- there is no preferential state rate for long-term capital gains. Both short-term and long-term gains are taxed at your regular marginal rate (up to 10.9% state, plus up to 3.876% NYC).
This matches California's treatment. A New Yorker selling $500K of appreciated stock pays up to 10.9% to New York (+ up to 3.876% to NYC) plus up to 20% (+ 3.8% NIIT) federally -- a combined rate that can approach 39%.
How 401(k) Contributions Affect Your NY Tax
Maxing out your 401(k) reduces your adjusted gross income, which directly reduces your New York State taxable income. For high earners near bracket thresholds, this can produce outsized savings.
Example: Consider an employee earning $1,100,000 (salary + RSUs). Without a 401(k) contribution, they're in the 9.65% bracket ($1,077,550+). With a maximum $23,500 contribution (2025 limit), their AGI drops to $1,076,500 -- just below the 9.65% threshold, keeping them in the 6.85% bracket.
| Without 401(k) Max | With $23,500 Contribution | |
|---|---|---|
| NY taxable income | ~$1,092,000 | ~$1,068,500 |
| Top NY bracket | 9.65% | 6.85% |
| NY tax on last $23,500 | $2,268 | $1,610 |
| NY tax savings | — | ~$658 |
The federal savings from the 401(k) contribution are much larger (reducing 37% bracket income), but the NY savings are a bonus. For employees near the $1,077,550 threshold, the 401(k) contribution provides a 2.8% additional state tax benefit on the marginal dollars.
Because NY does not index brackets for inflation, the $1,077,550 threshold (the jump from 6.85% to 9.65%) stays fixed while incomes rise. Over time, more employees will cross this threshold. Federal brackets adjust upward ~2.8% per year, but New York's stay flat -- meaning the real tax burden in NY gradually increases without any legislative action. A $1M earner today may be safely in the 6.85% bracket; the same real income in 5 years will cross into 9.65% due to nominal wage growth.
Key Differences: New York vs. California
If you're choosing between New York and California (or comparing offers), here's how the two states stack up for equity compensation:
| Feature | New York | California |
|---|---|---|
| Top marginal rate | 10.9% | 13.3% (incl. Mental Health Tax) |
| Local income tax | NYC: up to 3.876% | None |
| Combined top rate | 14.776% (with NYC) | 13.3% |
| Supplemental withholding | 11.70% (over-withholds) | 10.23% (under-withholds for high earners) |
| ISO treatment | Federal conformity (AMT only) | Ordinary income (non-conformity) |
| State AMT | No | Yes (7%) |
| Bracket inflation indexing | No | Yes |
| Capital gains | Ordinary income rates | Ordinary income rates |
| Standard deduction (single) | $8,000 | $5,706 |
Bottom line: California has a higher marginal rate and taxes ISO exercises as ordinary income. New York has a lower state rate but NYC adds significantly. For ISO-heavy compensation, New York is more favorable because ISOs aren't taxed at exercise. For RSU-heavy compensation, both states are expensive, but California edges higher for top earners.
Planning Tips for New York Tech Employees
1. Don't confuse over-withholding with over-taxation. New York's 11.70% supplemental rate may over-withhold, but your total state tax bill is still calculated at your marginal rate. The refund is nice but doesn't change your actual tax burden.
2. Factor in NYC tax for residency decisions. The 3.876% NYC tax is substantial. An employee earning $300K who lives in NYC pays roughly $11,600 more per year than someone who lives in Westchester, Long Island, or New Jersey (though NJ has its own taxes).
3. Take advantage of NY's ISO conformity. Unlike California, ISO exercises in New York carry no state tax consequence. This makes multi-year ISO exercise planning somewhat simpler -- you only need to optimize for federal AMT.
4. Plan for the $1,077,550 bracket jump. NY's jump from 6.85% to 9.65% at $1,077,550 is steep. If a large RSU vest or stock sale pushes you above this threshold, consider whether timing equity events across years could keep you in the lower bracket.
For a comparison across states, see our State Income Tax Guide. For federal tax bracket planning, see the 2026 Federal Tax Brackets guide. If NY is over-withholding on your RSUs, our guide on how RSUs affect your tax refund explains what to expect at filing time. For effective rates at different income levels, see our RSU tax rate guide.
One exercise is good. A 5-year plan is $128K better.
The Multi-Year Exercise Planner models Conservative, Balanced, and Aggressive strategies side-by-side — so you can see exactly how spreading exercises across 3-5 years reduces your total tax bill.
- Compare 3 strategies with exact tax projections
- AMT credit carryforward tracking across years
- Exit sensitivity analysis at different valuations
Calculate RSU Withholding
Estimate your RSU tax withholding and net proceeds after vesting.
Try Calculator →Frequently Asked Questions
What is New York's top income tax rate? New York's top state income tax rate is 10.9%, which applies to taxable income over $25,000,000 for single filers. However, most high-earning tech workers fall in the 6.85% bracket ($215,400-$1,077,550) or the 9.65% bracket ($1,077,550-$5,000,000). If you live in New York City, add up to 3.876% in city income tax, bringing the combined rate to as high as 14.776%.
Do I pay NYC tax on RSU income? Yes, if you are a New York City resident. NYC taxes all income including RSU vesting at rates up to 3.876%. NYC residency is based on where you live, not where you work. If you maintain a permanent place of abode in NYC and spend more than 183 days in the city, you are a statutory resident and owe NYC tax on all your income.
What is the NYC residency test? NYC uses two tests: the domicile test (where you intend to make your permanent home) and the statutory resident test (maintaining a permanent place of abode in NYC + spending more than 183 days in the city). You can owe NYC tax under either test. Many tech workers who keep a NYC apartment but work elsewhere get caught by the statutory resident rule.
Does New York tax stock options exercised while I lived there? New York follows federal ISO treatment, so ISO exercises are not subject to NY ordinary income tax -- only federal AMT. However, for non-qualified stock options (NSOs), the exercise spread is taxed as ordinary income by NY. If you exercised NSOs while living in New York and then moved, NY may still claim tax on a portion based on the allocation of work-days in NY during the option period.
How does New York's supplemental withholding compare to marginal rates? New York's supplemental withholding rate of 11.70% exceeds the actual marginal rate for most tech workers. If your income falls in the 6.85% bracket ($215,400-$1,077,550), your employer over-withholds by nearly 5% on every RSU vest. This means most NY tech employees get a substantial state tax refund each year -- the opposite of California, where the supplemental rate often under-withholds.
Can I reduce my NY tax with 401(k) contributions? Yes. 401(k) contributions reduce your adjusted gross income, which reduces your NY taxable income. This is especially valuable if you're near the $1,077,550 threshold where the rate jumps from 6.85% to 9.65%. A maximum $23,500 contribution (2025 limit) could keep you in the lower bracket and save hundreds in state tax, on top of the federal savings.
Tax Disclaimer: This content is for educational purposes only. Always consult with a licensed tax professional or certified public accountant before making financial decisions related to equity compensation, tax planning, or investment strategies.