If you’re reconciling the estate of a loved one with ties to New York State who passed on or after April 1st of this year, you should be aware that the recent amendments made to New York State estate tax laws may impact you.
Whether the deceased was a resident of New York at the time of his or her passing or their estate included real or tangible personal property in New York, the estate may very well be required to file a New York State estate tax return.
Under the new law, the New York State estate tax exclusion amount (formerly $1,000,000) is increased to $2,062,500 for decedents dying between April 1, 2014 and March 31, 2015. The exclusion amount will increase incrementally every April 1st until January 1, 2019 at which time it will match the Federal exclusion amount. The tax rates range from 3% for taxable estates of $500,000 and below to 16% for taxable estates over $10,100,000. Unlike the Federal law, NY does not allow for portability of the unused exclusion of a deceased spouse.
The new law also requires a 3-year look back for gifts made on or after April 1, 2014. If a NY resident passes within 3 years of making a taxable gift, the value of such gift is includible in the gross estate.
Estates that are subject to filing must do so within nine months of the date of death or risk penalties, though extensions may be granted if payment within the nine month period presents a hardship to the estate. As usual, however, interest will be due if an extension is opted for. In fact, even if you are not required to file a Federal estate tax return with the IRS, estates meeting the criteria still need to include a Federal estate tax form with their New York State estate tax return.
In order for your tax advisor to prepare the return, he or she will look to you to provide some or all of the following:
• Copies of the death certificate, will, appraisals, and/or relevant trusts;
• Letters of appointment for executors or estate administrators;
• Copies of documents pertaining to any litigation in which the estate is involved; or
• Documentation of any unusual items included on your return (such as assets, losses, transfers that occurred near the date of death, etc.).
To learn more about whether or not you must file as a result of the New York State estate tax laws, contact your Untracht Early tax professional.