For individuals who died before April 1, 2014, an estate tax return must be filed in New York state if the federal gross value of the estate is more than $1 million. In addition, the decedent must have been a resident of New York state at the time of his or her death. An estate tax return may also need to be filed if the decedent owned property in the state at the time of his her death.
Changes to New York laws relating to the estate tax exemption took effect April 1, 2014. That makes this a good time for New Yorkers to review their estate plan and do some forward-looking tax planning. The new law may make estate planning more complex for some residents.
The federal government taxes estates of more than $5.34 million at a 40 percent rate. However, for residents of New York any estate worth more than $1 million can be hit with a maximum rate of 16 percent. In other words, residents of New York may be paying a state estate tax without being required to pay a federal estate tax.