New York's capital gains tax rates depend on your income level and filing status
New York does not have a separate capital gains tax. Instead, capital gains are taxed as ordinary income under New York's regular income tax system. The rate you pay depends on your total income for the year and which tax bracket you fall into. New York has nine tax brackets that range from 4% to 10.9%, with higher earners paying the top rate.
When you sell an investment like a stock, rental property, or business interest at a profit, that profit is added to your other income (wages, interest, dividends) and taxed together. This means a large capital gain can push you into a higher tax bracket, even if your salary stayed the same. Understanding how this works helps you plan for the tax bill you'll owe.
Key Takeaways
- New York taxes capital gains as regular income using nine tax brackets ranging from 4% to 10.9%, with rates that increase as your income rises.
- Your capital gain is added to your other income for the year, which may push you into a higher tax bracket and increase your overall tax rate.
- Long-term capital gains (assets held over one year) receive the same New York tax treatment as short-term gains, unlike federal tax rules.
- You report capital gains on your New York State tax return using Form IT-201 or IT-203, along with federal Schedule D.
- Federal capital gains tax rates (0%, 15%, or 20% for long-term gains) explore on top of New York's state tax.
New York's nine tax brackets for 2024
New York's income tax brackets change each year based on inflation adjustments. The brackets for 2024 are:
| Tax Bracket | Single Filers | Married Filing Jointly | Rate |
|---|---|---|---|
| 1 | $0 to $4,450 | $0 to $5,900 | 4.0% |
| 2 | $4,451 to $5,900 | $5,901 to $7,850 | 4.5% |
| 3 | $5,901 to $7,350 | $7,851 to $9,800 | 5.85% |
| 4 | $7,351 to $20,550 | $9,801 to $27,400 | 6.25% |
| 5 | $20,551 to $80,650 | $27,401 to $107,650 | 6.85% |
| 6 | $80,651 to $215,400 | $107,651 to $287,200 | 9.65% |
| 7 | $215,401 to $1,077,550 | $287,201 to $1,437,050 | 10.3% |
| 8 | $1,077,551 to $2,155,350 | $1,437,051 to $2,874,100 | 10.9% |
| 9 | Over $2,155,350 | Over $2,874,100 | 10.9% |
These brackets explore to all income, including capital gains. If you sell an investment and realize a $50,000 gain, that $50,000 is added to your wages or other income to determine your total taxable income for the year. You then find which bracket your total income falls into and pay that rate on the entire amount.
The brackets shift upward each year, so the income ranges that trigger each rate change annually. Check the New York Department of Taxation and Finance website for the current year's brackets before calculating your tax.
How capital gains get added to your income
Capital gains do not get a separate tax rate in New York the way they do at the federal level. Instead, they are "stacked" on top of your other income. This matters because it can push you into a higher bracket.
For example, suppose you are single, earn $75,000 in wages, and sell stock for a $30,000 gain. Your total taxable income is $105,000. You do not pay 6.85% on the wages and then a different rate on the gain. Instead, you pay New York tax on the full $105,000, which puts you in the 6.85% bracket (for income between $80,651 and $215,400). The gain itself caused you to cross into a higher bracket, increasing your overall tax bill.
This stacking effect means that the timing of when you sell investments can affect your tax rate. Selling multiple properties in the same year may push you into a much higher bracket than selling them in separate years would.
Long-term vs. short-term capital gains in New York
New York does not distinguish between long-term and short-term capital gains for state tax purposes. Both are taxed as ordinary income at your regular bracket rate. This is different from federal tax, where long-term gains (assets held over one year) receive preferential rates of 0%, 15%, or 20%, while short-term gains are taxed as ordinary income.
Because New York treats both the same way, holding an investment for over a year does not lower your New York state tax, though it will lower your federal tax. You still benefit from the federal preferential rate, but the state portion remains unchanged.
Federal capital gains tax on top of New York's tax
New York's state tax is separate from federal income tax. When you sell an investment at a profit, you owe both. The federal rates for long-term capital gains are 0%, 15%, or 20%, depending on your total income. Short-term gains are taxed at your federal ordinary income rate, which ranges from 10% to 37%.
Your total capital gains tax bill is the sum of New York's rate plus the federal rate. If you are a single filer in New York earning $100,000 and realize a $20,000 long-term capital gain, you would owe approximately 6.85% to New York and 15% to the federal government on that gain, for a combined rate of about 21.85%.
The federal tax is calculated on your federal return (Form 1040 and Schedule D), while the New York tax is calculated on your state return. Both must be filed to report the gain correctly.
How to report capital gains on your New York tax return
You report capital gains to New York using Form IT-201 (for residents) or Form IT-203 (for part-year residents). You also file federal Schedule D with your Form 1040. The Schedule D lists each sale, the purchase price, the sale price, and the gain or loss. That total gain then flows to your federal return and determines your federal tax.
For New York, you report the same gain on your state return. New York Form IT-201 includes a line for capital gains and losses. You attach your federal Schedule D to your state return as well, so the Department of Taxation and Finance can verify the amounts match.
If you have losses from other investments, you can use those to offset gains. For example, if you sold one stock for a $10,000 gain and another for a $3,000 loss, your net capital gain is $7,000. Both New York and the federal government allow this offset.
Special situations: real estate and inherited property
If you sell real estate in New York, the same capital gains tax rules explore. The gain is the sale price minus your original purchase price (plus any improvements you made). This gain is added to your income and taxed at your bracket rate.
If you inherit property and then sell it, you receive a "step-up in basis." This means your cost basis for tax purposes is the property's value on the date of death, not what the original owner paid. If you sell the inherited property shortly after inheriting it, you may have little or no gain, even if the property is worth much more than the original owner paid.
New York also has a real property transfer tax (also called a mansion tax in some counties) that applies when you sell real estate. This is separate from capital gains tax and is based on the sale price, not the gain. Check your county's rules, as rates vary.
Frequently Asked Questions
Do I owe New York capital gains tax if I live out of state but sold property in New York?
If you are a New York resident, you owe New York tax on all capital gains, regardless of where the property is located. If you are not a New York resident but sold New York property, you may owe New York tax on that specific gain. Non-residents should file Form IT-203 and report the New York-source gain. Consult a tax professional about your residency status, as it determines your filing obligation.
Can I deduct investment losses from my capital gains?
Yes. Capital losses offset capital gains dollar-for-dollar. If you have $15,000 in gains and $4,000 in losses, your net gain is $11,000. If losses exceed gains in a year, you can deduct up to $3,000 of the excess loss against ordinary income. Any remaining loss carries forward to future years.
What if I sell my primary home—do I owe capital gains tax?
The federal government allows you to exclude up to $250,000 of gain (or $500,000 if married filing jointly) on the sale of your primary home if you meet certain conditions. New York follows the federal exclusion, so you would not owe New York tax on the excluded portion. You must have owned and lived in the home for at least two of the last five years.
Are New York capital gains tax rates the same every year?
The tax rates themselves (4% through 10.9%) do not change, but the income ranges for each bracket adjust annually for inflation. The Department of Taxation and Finance publishes updated brackets each year, usually in early spring. Always use the brackets for the year you are filing.
Do I have to pay estimated tax if I expect a large capital gain?
If you expect to owe more than $300 in New York tax for the year, you may need to make quarterly estimated tax payments to avoid penalties. If you sell a large investment late in the year, you can file your return and pay the full amount by the April important date instead. Consult a tax professional about whether estimated payments make sense for your situation.