You've probably looked at your paystub and wondered where that huge chunk of change actually goes. Honestly, if you live in the Empire State, it’s a lot. New York is famous for many things—pizza, the Yankees, and, unfortunately, some of the highest taxes in the country. But here's the thing: most people don't actually understand how new york state tax brackets work. They think if they get a raise and move into a higher bracket, they’ll suddenly take home less money overall.
That’s basically impossible.
We have a progressive tax system. It’s like a staircase. You only pay the higher rate on the dollars that actually land on that specific step. If you’re a single person and your taxable income hits $85,000, you aren't paying the top rate on the first dollar you earned. You're paying 4% on the first few thousand, then a bit more, and so on.
The 2025-2026 Reality Check
Governor Kathy Hochul recently signed off on some shifts in the 2026 fiscal plan. For most of us, this is actually good news. They’re phasing in some middle-class tax cuts, slightly shaving down the percentages for those in the middle of the pack. But if you’re pulling in seven or eight figures? Yeah, Albany still wants a very large piece of that pie.
For the 2025 tax year (the ones you're actually filing right now in early 2026), the state uses nine different brackets. It starts at a modest 4% and climbs all the way to a staggering 10.9%. That top rate is reserved for the ultra-wealthy—people making over $25 million.
Let’s look at the numbers for a single filer or someone married filing separately. For the first $8,500 you make, the state takes 4%. From there, it jumps to 4.5% for the next bit of income up to $11,700. Then 5.25% up to $13,900. Once you pass that mark, you're in the 5.5% range until you hit $80,650.
Most "regular" professionals fall into the 6% bracket, which covers income between $80,650 and $215,400. If you’re doing quite well and making over $215,400, you’re looking at 6.85%.
Why Filing Status Changes Everything
It’s not just about what you make; it’s about who you live with. Or, more accurately, how you tell the government you live. If you’re married filing jointly, those "steps" on the staircase are basically twice as wide.
For a married couple, that 4% rate applies to the first $17,150. The 6% bracket doesn't even start until you’ve collectively earned $161,550. This is why some people talk about the "marriage penalty" or "marriage bonus"—depending on how much each spouse earns, the new york state tax brackets can either be your best friend or a total headache.
Heads of household get a different deal entirely. Their brackets sit somewhere in the middle. For example, their 6% bracket kicks in at $107,650. It’s meant to give a bit of a break to single parents or people supporting relatives, acknowledging that their costs of living are naturally higher.
The New York City Surcharge
Living in the city? Sorry. You’ve got a whole extra layer to deal with. NYC residents pay a local income tax on top of the state tax. For 2025-2026, those NYC rates range from about 3.078% to 3.876%.
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Think about that for a second.
If you’re a high earner in Manhattan, your combined state and city marginal tax rate could be north of 14%. That’s before you even touch federal taxes or FICA. It’s a huge burden. Honestly, it’s a big reason why you see so many people moving to Florida or Texas once they hit a certain income level.
The Standard Deduction: Your First Line of Defense
Before you start doing the math on those brackets, you have to subtract your standard deduction. This is the amount of income the state basically agrees not to tax. For 2025 (filed in 2026), these are the numbers:
- Single filers (who aren't dependents): $8,000
- Married filing jointly: $16,050
- Head of household: $11,200
There’s also a little-known "supplemental tax" for people whose adjusted gross income (AGI) exceeds $107,650. It’s a bit of a "tax on a tax" that New York uses to claw back the benefit of the lower tax brackets from higher earners. Basically, once you make enough, the state decides you don't deserve the 4% rate on your first few thousand dollars anymore, and they make you pay for it.
Real World Example: The "Middle Class" Struggle
Let’s say you’re a single graphic designer in Brooklyn making $90,000.
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First, you take off your $8,000 standard deduction. Now you’re at $82,000 of taxable income. You’ll pay 4% on the first $8,500. Then 4.5% on the next $3,200. You keep climbing those steps until you hit the 6% bracket for that last bit of income over $80,650.
In total, your state tax bill might be around $4,350. But if you live in NYC, you've gotta tack on another $3,000 or so for the city. Suddenly, you've paid over $7,000 in local income taxes.
What’s Changing in 2026?
The "One Big Beautiful Bill Act" and Governor Hochul’s latest budget have introduced a few wrinkles. For the 2026 tax year, we’re seeing a 0.1% reduction in those middle-income brackets. It doesn't sound like much—and honestly, for most, it isn’t—but it adds up over millions of taxpayers.
There's also a massive expansion of the Empire State Child Tax Credit. If you have kids under four, that credit is jumping to $1,000 per child. For older kids, it’s going up to $500. This is a direct credit, meaning it comes right off your tax bill, which is way better than a deduction.
Also, a heads-up for the tipped workers: there’s a proposal on the table to eliminate state income tax on the first $25,000 of tipped income. If that passes, it’s a game-changer for the hospitality industry in the city.
How to Not Get Crushed
If you want to lower which of the new york state tax brackets you fall into, you have to lower your taxable income. The easiest way? Retirement accounts.
Contributions to a 401(k) or a traditional IRA lower your AGI. If that graphic designer from our example put $10,000 into their 401(k), their taxable income would drop from $82,000 to $72,000. Not only do they save for the future, but they also potentially avoid the 6% bracket entirely.
- Check your residency: If you spent more than 183 days in New York but your "domicile" is elsewhere, New York might still try to claim you as a resident. They are aggressive about this.
- Itemize if it makes sense: While the federal SALT (State and Local Tax) deduction is capped, New York allows you to itemize on your state return even if you took the standard deduction on your federal return.
- Look into the PTET: If you own a small business or are part of a partnership, the Pass-Through Entity Tax (PTET) is a way to potentially bypass federal tax caps on state tax deductions. It’s complicated, but it can save thousands.
New York's tax system is a beast. It’s progressive, it’s layered, and it’s constantly shifting. But if you know where the brackets sit and how to use deductions to your advantage, you can at least keep a little more of what you earn.
Your next move: Take a look at your last tax return and find your "Taxable Income" line. Compare it to the current brackets to see if you're hovering right at the edge of a higher rate. If you are, increasing your 401(k) contributions by even 1% or 2% before the year ends could pull you down into a lower bracket and save you a decent chunk of change when you file next spring.