New York State Tax Guide for US Expats

Federal returns are not the only US tax return that an American expat needs to be aware of. If you have ties to New York, you could be a taxable resident even while living overseas. Understanding your New York State tax obligations will only help you stay tax-compliant without penalties.

Understanding Residency Rules in New York

Before filing New York State taxes, you must determine your filing status. You will be considered a full-year, part-time, or non-resident.

A full-year resident is not as simple as saying you permanently live in New York. If you consider New York your domicile (the permanent home you intend to return to) or have a permanent place of abode for most of the year, you are also considered a resident.

For those who moved out of New York and have served all ties to the state, you will be:

A part-year resident in the year you moved out of New York. However, you can be taxed as a full-year resident if you were in New York for over 183 days.

A non-resident is someone who has not lived in New York for the entire tax year.

Exceptions to Domicile

Even if you consider New York a domicile, you could be exempt from New York State taxes if you meet all the criteria for either group A or B.

Group A: No permanent place of abode in New York, maintained one outside New York all year and spent 30 days or less in New York.

Group B: Spent 450+ days abroad in 548 days, with family spending less than 90 days in New York, and met a day-limit formula for New York presence.

Do You Need to File a New York State Tax Return as an Expat?

If you’re considered a full-year resident, you will be taxed on your worldwide income, which includes foreign earned income. As for part-time or nonresident, only your New York income is taxable.

New York Income Tax Rates

New York has a progressive tax system, with rates ranging from 4% to 10.9%, depending on income level. These high rates make it essential for expats to assess whether they still have filing obligations.

Tax Rate	Married Filing Jointly or Widowed	Single or Married Filing Separately	Head of Household
4%	$17,150 or less	$8,500 or less	$12,800 or less
4.5%	$17,151-$23,600	$8,501-$11,700	$12,801-$17,650
5.25%	$23,601-$27,900	$11,701-$13,900	$17,651-$20,900
5.5%	$27,901-$161,550	$13,901-$80,650	$20,901-$107,650
6%	$161,551-$323,200	$80,651-$215,400	$107,651-$269,300
6.85%	$323,201-$2,155,350	$215,401-$1,077,550	$269,301-$1,616,450
9.65%	$2,155,351-$5,000,000	$1,077,551-$5,000,000	$1,616,451-$5,000,000
10.3%	$5,000,001-$25,000,000	$5,000,001-$25,000,000	$5,000,001-$25,000,000
10.9%	$25,000,001 and over	$25,000,001 and over	$25,000,000 and over

Source: New York State Department of Taxation and Finance

Foreign Tax Benefits in New York

As a US expat, foreign expat tax benefits are a lifesaver, and thankfully, some can be applied to your New York state tax return. If you qualify for any Foreign Earned Income Exclusion on your federal tax return, you automatically qualify on your New York state tax return.

As for the Foreign Tax Credit, it can be used, but only on Canadian-earned income. So, if you are a US expat living in Canada, you can use both the Foreign Earned Income Exclusion and Foreign Tax Credit.

New York State Tax Forms 2024

Your 2024 New York State tax forms will depend on whether you’re a non-resident, part-time, or full-time resident. For expats, you could expect to need these 2024 New York State tax forms:

• Form IT-201: Full-year resident income tax return
• Form IT-203: Non-resident and part-year resident income tax return
• Form IT-112-R: Claim for credit for taxes paid to another state or foreign country
• Form IT-150: For non-resident New York taxpayers who are claiming deductions

New York State Deadlines and Extensions

The deadline for filing a New York State tax return is the same as federal returns. The standard deadline is April 15th, with an automatic two-month extension for expats until June 15th.

Additionally, if you require more time, there is a possibility to extend until October 15th. New York State extensions must be filed with Form IT-370 by April 15th to avoid penalties. Additionally, if you owe New York taxes, you must pay by April 15th – there are no payment extensions!

What Happens if You Don’t File?

You will be penalized for failing if you do not file state taxes when required. If you fail to file your New York state tax return, these are the penalties that will be imposed:

5% of the tax due for each month (or part of a month) the return is late, up to a maximum of 25%

If your return is more than 60 days late, your minimum penalty is the lesser of $100 or the total amount due on the return

There are more specific penalties on the New York government website.

Enforcement

New York is known for aggressively pursuing unpaid taxes for anyone, including expats. Like the IRS, their system can track down individuals who have not filed and demand payment collection through ceasing property or wages. If you are a resident for tax purposes, ensure you are filing on time.

State Amnesty Programs

New York has a voluntary disclosure program that allows taxpayers to settle outstanding tax liabilities with no penalties or criminal charges. However, this program has a catch: if you have filed but have not paid your debts, you will not qualify for this program.

How to Sever Ties with New York to Avoid Future Tax Liabilities

Before moving abroad, moving to a no-state tax state for a few months could help to avoid having to file a New York state tax return. Another option to eliminate the need for state taxes is to sever residency by:

• Canceling Your Voter Registration: This is a strong indication that you are no longer a resident.
• Surrendering Your New York Driver’s License: Exchange your New York license for a foreign license or a different state license.
• Sell or Rent Your Property: If you own property in New York, selling or renting it demonstrates that you no longer maintain a home in the state.
• Change Your Mailing and Banking Addresses: Update your addresses to reflect your new location abroad.

State residency is not black or white, so you don’t need to do all the above to prove you ended your residency. Once ties have been severed, you must show that you have established permanent residency abroad with documents such as a long-term visa, signing a lease to foreign property, or enrolling your children in schools abroad.

File Your New York State Tax Return Today!

New York’s strict tax laws require expats to file correctly or take steps to sever ties if they wish to avoid future tax liabilities. If uncertain about tax status, consulting a Tax Professional or using tax filing software can help ensure compliance.