Here in New York, some, but not all, estates of deceased individuals are subject to a state estate tax. What determines whether or not a given estate here in New York will have a state estate tax liability? A deceased person’s estate will be subject to the tax if, when you add the gross estate amount and the includible gifts amount for the estate together, the combined amount exceeds a certain cutoff level.
What is this cutoff level? The answer to this question will actually soon be changing. The cutoff amount for the New York estate tax is currently $2,062,500. In a few days though, the amount will rise. For deaths that occur on or after April 1 of this year, the cutoff amount will instead be $3,125,000. The cutoff amount will rise again in April 2016 and yet again in April 2017.
Whether or not a deceased person’s estate exceeds the applicable state estate tax cutoff level here in New York can be a very impactful thing, as the state estate tax can end up taking quite a bit out of an estate.
If a person from here in New York State is concerned that their estate might end up exceeding the applicable state estate tax cutoff amount when they pass away, they may want to speak to an attorney about estate tax planning. There are certain legal tactics that may be able to help lessen or eliminate a potential state estate tax liability. For example, certain trusts can sometimes have useful applications in this regard.
Source: The New York State Department of Taxation and Finance, “Estate tax,” Accessed March 27, 2015