• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Who We Are
    • About Our Firm
    • Career Opportunities
    • Meet Our Team
    • News and Events
    • Seniors Rock Radio
  • Estate Planning
    • Elder Law & Medicaid Planning
    • Estate Planning Services
    • Estate and Gift Tax Figures
    • Family Farm Succession Planning
    • Family-Owned Businesses & Farms
    • IRA Planning
      • Planning With An IRA
      • IRA & Retirement Planning
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law Resources
      • Elder Law Reports
    • Guardianship & Conservatorship
    • Hospice Care
    • Veteran’s Benefits
  • Resources
    • Definitions
    • FREE Estate Planning Worksheet
    • FREE Webinars
    • Estate Administration Legal Guide
    • Estate Planning Articles
      • Questions for Your Estate Planning Attorney Before Creating Your First Estate Plan
      • How to Create Your First Estate Plan in 2022
      • How to Choose a Guardian for Your Child
      • Address These Three Questions in Your First Estate Plan
    • Estate and Gift Tax Figures
    • Frequently Asked Questions
      • Adult Guardianship
      • Alzheimer’s Care
      • Custodial Accounts for Minors
      • Estate Planning
      • FAQs for Families Without an Estate Plan
      • Elder Law
      • IRA & Retirement Planning
      • Is Your Estate Plan Outdated?
      • Legacy Planning
      • LGBTQ Estate Planning
      • Medicare and Social Security
      • Probate
      • Probate Avoidance
      • Irrevocable Trusts
      • Trust Administration
      • Trusts
      • Veterans’ Benefits
      • Wills
    • Newsletters
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
    • Top Estate Planning Techniques
  • Reviews
    • Our Reviews
    • Review Us
  • Medicaid Planning
    • Medicaid Planning
    • Emergency Medicaid & Nursing Home Planning
    • Medicaid Frequently Asked Questions
    • Medicaid Resources
  • Blog
  • Contact Us

Law Office of Michael Robinson, P.C.

Estate Planning Services in Rochester, New York and the Finger Lakes Area

Connect With Us Today

(585) 374-5210
Law Pay Button
Attend a Free Webinar
Home » Estate Planning » What Is the 2021 New York Estate Tax Exclusion?

What Is the 2021 New York Estate Tax Exclusion?

February 23, 2021Estate Planning

New York estate taxWe recently published a post that provided information about potential changes to the federal estate tax and the capital gains tax. Here in New York, we also have a state-level estate tax to contend with, and an important threshold has been updated for 2021.

New York Estate Tax Exclusion

The exclusion is the amount that can be transferred before the estate tax would be applied on the remainder. In 2021, the exclusion was $5.85 million, and this year it has gone up to $5.93 million.

This is about half of the $11.7 million federal estate tax exclusion, so you could be exposed to the New York tax even if you are exempt on the federal level. There is a graduated rate in our state that starts at 3.06 percent for the first $500,000, and it maxes out at 16 percent for estates that exceed $10.1 million in value.

There is a peculiar provision in the New York state estate tax law that is called the exclusion “cliff.” If the value of the estate exceeds the exclusion amount by five percent or more, the entirety of the estate would be subject to taxation.

If you own valuable property in a state outside of New York that has an estate tax, that tax would be applicable if its value exceeds the exclusion in that state. This is something to keep in mind, because the exclusion in a state like Massachusetts is just $1 million.

Inheritance Tax

Many people assume that the term “inheritance tax” is just another way of referring to an estate tax. This is understandable, but in reality, these are two different forms of taxation that can enter the picture when an estate is being administered.

As we have touched upon, an estate tax is levied on the portion of an estate that exceeds the amount of the exclusion. The entire estate would be taxed before it is distributed to the heirs, and there would be no further transfer taxes.

An inheritance tax works in a different manner. This tax can be levied on distributions to each individual inheritor.

There is no federal inheritance tax, and there are just six states in the union that have state-level inheritance taxes. Fortunately for us, the Empire State is not one of them.

However, if you inherit property that is located in a state that has an inheritance tax, the tax in that state would be a factor. New Jersey is one of the six states with inheritance taxes, and Pennsylvania is another one.

We should point out the fact that close relatives are typically exempt from inheritance taxes. For example, in New Jersey, spouses, domestic partners, parents, grandparents, children, stepchildren, and grandchildren are completely exempt.

Federal Estate Tax Overview

While we are on the subject, we should provide a brief overview the federal estate tax parameters. As we have stated, the exclusion is $11.7 million, and the maximum rate of the federal tax is 40 percent.

There is an unlimited marital deduction, so you can transfer any amount of property to your spouse free of taxation. One caveat to this statement is the fact that this deduction is only available to American citizens.

You cannot give large gifts to loved ones to avoid the estate tax, because there is a gift tax, and it is unified with the estate tax. The exclusion applies to lifetime gifts and the estate that will be transferred after your passing.

There is no gift tax on the state level, but gifts that you give within three years of your death are considered to be part of your estate for tax purposes.

Schedule a Consultation Today!

If you are exposed to any of these taxes, there are steps you can take to mitigate the damage. We can help you develop a tax efficiency strategy, and of course, we can be of assistance if you do not have any transfer tax concerns.

You can schedule a consultation appointment right now if you call us at 585-374-5210, and you can fill out our contact form if you would prefer to send us a message.

 

  • Author
  • Recent Posts
Michael Robinson, Estate Planning Attorney
Michael Robinson, Estate Planning Attorney
Clients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors.
Michael Robinson, Estate Planning Attorney
Latest posts by Michael Robinson, Estate Planning Attorney (see all)
  • How Estate Planning for a Family May Trap the Unwary Practitioner - August 31, 2022
  • State Income Taxation of Social Security Benefits - August 24, 2022
  • Understanding Tax Apportionment Clauses - August 17, 2022

Other Articles You May Find Useful

How Estate Planning For A Family May Trap The Unwary Practitioner 150x150
How Estate Planning for a Family May Trap the Unwary Practitioner
State Income Taxation Of Social Security Benefits 150x150
State Income Taxation of Social Security Benefits
Understanding Tax Apportionment Clauses 150x150
Understanding Tax Apportionment Clauses
estate planning
Estate Planning in Five Easy Steps
How Do I Trust Thee…Part III 150x150
How Do I Trust Thee…Part III
How Do I Trust Thee…Part III 150x150
How Do I Trust Thee…Part I

Primary Sidebar

Law Office of Michael Robinson, P.C.

Blog Subscription

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

TESTIMONIALS

News & Events

Seniors Rock Radio Show Recording 5-1-21

https://drive.google.com/file/d/1U7UkQbEGy-xY7XFAXvX9Qz7pKSVDVV3D/view?usp=drive_web   Author Recent Posts Michael Robinson, Estate Planning AttorneyClients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors. Latest posts by Michael Robinson, Estate Planning Attorney (see all) How Estate Planning for a Family May Trap the Unwary Practitioner -... Read more →

Pittsford Office

1163 Pittsford-Victor Road, Suite 120 (Powder Mill Office Park)
Pittsford, NY 14534-3817
Phone: (585) 374-5210
Fax: (585) 485-0394

See Larger Map Get Directions

Map

mrobinson_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
robinson law logo

The Law Office of Michael Robinson, P.C.

Attorney Advertisement


© 2023 American Academy of Estate Planning Attorneys, Inc.