If the value of a person's gross estate in New York exceeds the federal estate tax exemption, it will be necessary to pay taxes on the estate. However, with the passage of the Tax Cuts and Jobs Act, the exemption increased to more than $11 million per person and twice that for couples. This means that most people will not have to be concerned about estate tax.
Determining the gross value of an estate involves taking all assets into account, including stocks, bank accounts, real property both in and outside of the United States, annuities, some proceeds from life insurance, annuities and joint assets with rights of survivorship. The gift tax exemption along with adjustments for taxable gifts must also be accounted for. If the gross estate is worth more than the federal exemption, the executor usually has to file form 706 with the IRS even if no estate tax must be paid.
The deadline for this filing and for paying taxes is nine months after the person's death. In some cases, an extension of six months may be granted although this requires filing an additional form. While these rules are generally applicable to people who are citizens or residents, it may be necessary to file a tax form for nonresidents who have assets in the United States over a certain amount.
There are strategies people can use to reduce estate tax, and an attorney may be able to assist in this tax planning. People should also review their estate plans regularly. For example, in some cases, people who made their estate plan prior to the passage of the TCJA may want to revise it in light of the change in the exemption.