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    New York State Rate Increase

    The New York State 2021 to 2022 budget increased certain personal income tax rates for the 2021 tax year.  Practitioners should consider warning affected clients about the effects of these new rates.

    The budget increases the 8.82% bracket to 9.65%.  In addition, for taxable income over $5 million and up to $25 million, the new tax rate is 10.3%.  For taxable income over $25 million, the new tax rate is 10.9%. 

    In May 2021, New York State issued a revision of the instructions for the 2021 version of Form IT-2105, Estimated Tax Payment Voucher for Individuals.  According to the revised instructions, taxpayers who compute their 2021 estimated tax payments using 110% of their New York adjusted gross income from the 2020 tax year are not required to make any change to the estimated taxes that they pay. 

    Taxpayers who compute their 2021 estimated taxes using 90% of their expected 2021 tax liability must adjust their 2021 estimated tax payments to include any shortfall caused by the increase in rates in their third quarter estimated tax payments due on September 15, 2021.

    The information provided herein is provided with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional service. As such, M + O = CPE, Inc. and the author disclaim any responsibility or liability for the information supplied herein or the application of said information.