New York is one of the states that taxes estates in its own right, and it does so with a feature that catches families off guard: an exclusion that disappears entirely once an estate passes a defined point. That single rule shapes more New York estate planning than any other, and it applies at values far below the federal threshold.
This page explains New York’s estate tax and its cliff, how the state’s rules differ from federal law, what a New York estate plan contains, and when Surrogate’s Court becomes involved. Our attorneys serve clients across New York. For a free consultation, call 212-655-5483.
Robert B. Vaksman, Esq.
Founding Partner
“Some cases are easier than others, but this doesn’t matter at Vaksman Khalfin, because we have the resources to help our clients no matter what is at stake, especially if it’s hard."
Alan D. Khalfin, Esq.
Partner & Managing Attorney
"People call me when they need to plan, but also when something terrible has happened and they need help. It is personal to my clients, so it is personal to me. We have to help: no matter what."
Does New York Have Its Own Estate Tax?
Yes. New York imposes a state estate tax separate from the federal one, and its threshold is far lower. For deaths between January 1 and December 31, 2026, the New York basic exclusion amount is $7,350,000, against a federal basic exclusion of $15,000,000. New York also applies a cliff: under Tax Law § 952(c), no credit is allowed to the estate of a decedent whose New York taxable estate exceeds 105% of the basic exclusion amount — meaning the entire estate becomes taxable, not just the excess.
Key Takeaways
- New York’s basic exclusion amount is $7,350,000 for deaths in 2026, up from $7,160,000 in 2025.
- The federal basic exclusion for 2026 is $15,000,000, so an estate can owe New York tax while owing nothing federally.
- Between 100% and 105% of the exclusion, New York’s credit phases out on a formula; above 105%, it is eliminated entirely.
- For 2026, that 105% point falls at $7,717,500.
- New York estates are administered through Surrogate’s Court, and the state’s will execution formalities are specific.
New York’s Estate Tax and the Cliff
The New York State Department of Taxation and Finance publishes the basic exclusion amount by date of death:
| Dates of death | New York basic exclusion amount |
|---|---|
| January 1, 2026 – December 31, 2026 | $7,350,000 |
| January 1, 2025 – December 31, 2025 | $7,160,000 |
| January 1, 2024 – December 31, 2024 | $6,940,000 |
The exclusion is indexed and rises most years. What makes New York unusual is what happens just above it.
Under New York Tax Law § 952(c), a credit is allowed against the estate tax. Where the New York taxable estate is at or below the basic exclusion amount, the credit equals the tax that would otherwise be due, so nothing is owed. Where the taxable estate exceeds the exclusion by five percent or less, the credit is reduced on a statutory formula. And the statute then provides that no credit is allowed at all to the estate of any decedent whose New York taxable estate exceeds 105% of the basic exclusion amount.
The consequence is severe. An estate above that line is taxed on its entire value rather than on the amount above the exclusion. For 2026, with an exclusion of $7,350,000, the cliff point sits at $7,717,500.
| New York taxable estate, 2026 | How the credit applies |
|---|---|
| At or below $7,350,000 | Credit equals the tax otherwise due; no New York estate tax |
| Above $7,350,000 but not above $7,717,500 | Credit is reduced on the statutory formula in § 952(c) |
| Above $7,717,500 | No credit allowed; the full taxable estate is subject to tax |
This produces an effect that is unusual in tax law: within the phase-out band, an additional dollar of estate value can cost the beneficiaries more than a dollar. It is why New York planning often focuses on where an estate sits relative to that line rather than on reducing the estate generally.
New York and Federal Rules Compared
| New York | Federal | |
|---|---|---|
| Basic exclusion, 2026 | $7,350,000 | $15,000,000 |
| Treatment above the threshold | Credit phases out to 100%–105%, then is eliminated; the whole estate becomes taxable | Tax applies to the amount above the exclusion |
| Separate state gift tax | New York does not impose one | Gift tax is unified with the estate tax |
The gap between the two figures is the practical centre of New York planning. A family well clear of federal estate tax can still face a substantial New York bill, and the households most exposed are not the wealthiest — they are the ones whose homes, retirement accounts, and life insurance happen to add up to a figure near the state line.
New York also adds certain gifts made within a look-back period before death back into the New York gross estate, with statutory exceptions. Because gifting is the most common response to the cliff, the interaction between the look-back and the cliff is worth reviewing carefully before making transfers. Our estate tax planning overview covers the federal side.
What a New York Estate Plan Contains
| Document | What it does | When it operates |
|---|---|---|
| Will | Directs who receives property passing through the estate; names guardians for minor children | At death |
| Revocable living trust | Holds assets transferred into it and directs their management and distribution | During life and at death |
| Power of attorney | Names who can act on your financial affairs if you cannot | During life |
| Health care proxy and living will | Names who makes medical decisions for you and records your wishes | During life |
| Titling and beneficiary designations | Determines how individual assets actually pass, sometimes overriding a will | At death |
New York’s will execution formalities under the Estates, Powers and Trusts Law are specific, and a document that does not meet them may be denied probate. New York also has its own statutory form for powers of attorney, and a form that does not conform can be refused by financial institutions — a common and avoidable problem.
That last table row is where plans most often fail in practice. A trust governs only what has been transferred into it, and retirement accounts and life insurance generally pass to whoever is named on the beneficiary form regardless of what a will says.
What you can expect
from Vaksman Khalfin Estate Planning Attorneys
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Using our combined expertise, we will analyze your matter to design a strategy by using the broadest array of legal resources available, while continuously being mindful of costs.
We will provide original, innovative solutions, drawing upon our deep knowledge of advanced strategies in order to present a comprehensive plan for your needs, in a systematic, practical and client-friendly manner.
While designing a strategy calls on creative skills, plan implementation relies entirely on strong management. Each client is represented by a team of at least 2 attorneys and 2 staff members. Although it may seem like cost-savings for a client to work with an attorney 1-1; not only does it not cut costs, but it often results in critical errors or omissions in the representation. Through proper management and team-work, we aim to deliver exceptional and efficient legal services, while exceeding our clients’ expectations.
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Surrogate's Court and New York Administration
New York estates are administered through Surrogate’s Court, with a separate court in each county. A will is offered for probate and, if admitted, the court issues letters testamentary to the executor; where there is no will, letters of administration are issued to an administrator. Those letters are what banks and transfer agents rely on.
New York procedure requires notice to distributees — the people who would inherit under intestacy — which can mean locating relatives who were not part of a family’s plans. Where a will disinherits someone who would otherwise take, that person still receives notice, which is one reason drafting matters as much as intent. New York also provides a simplified small estate proceeding for estates below a statutory threshold, and a surviving spouse has a statutory right of election that a plan cannot simply ignore.
Who Should Look at This Sooner
- Anyone whose estate is between roughly $6 million and $8 million. This is the band where the cliff does its damage, and where the difference between planning and not planning is largest.
- New York City property owners. Real estate appreciation moves families across the state threshold without any change in how they live.
- People holding substantial life insurance. Policies owned by the insured are generally included in the estate, and they can push an estate over the line on their own.
- People who moved to or from New York. Domicile determines whether the state’s estate tax applies to a full estate, and out-of-state documents may not meet New York’s formalities.
- Non-residents owning New York real property. New York can reach New York-situs property in a non-resident’s estate.
Estate Planning for New York City Families
We work with families across New York City and the surrounding counties. The pattern here is distinctive: a co-op, condo, or brownstone bought decades ago can by itself approach the state exclusion, so households who would never describe themselves as wealthy find their estates within reach of a tax the federal system would never touch.
Co-op ownership adds its own wrinkle, since shares in a cooperative are personal property rather than real property and boards impose their own transfer requirements — a point that matters both for how the interest is held and for what happens at death. Details about the office are on our New York City office page, and our New York practice page covers our other work in the state.
How We Help
At Vaksman Khalfin, PC we start with what you own, how it is titled, and where you are domiciled — then work out where your estate sits relative to the New York threshold and what the realistic options are. Where an estate is comfortably below the exclusion, we say so rather than building complexity around a tax that will not apply. Where it is near or above the line, we walk through the available approaches, what each requires, and what each costs in flexibility and control.
Our New York trusts and estates work is led by Robert B. Vaksman, who is admitted in New York and holds a Master of Laws in Taxation from New York University School of Law, together with Alan D. Khalfin. Initial consultations are free. To talk with a New York estate planning attorney, call 212-655-5483 or schedule a consultation. Our New York trust and estate overview covers the wider practice.
This page provides general information about New York and federal law and is not legal or tax advice; reading it does not create an attorney-client relationship. Tax rules change and apply differently to different situations. Every situation is different, and prior results do not guarantee a similar outcome.
Reviewed by Robert B. Vaksman, Partner, Vaksman Khalfin, PC (admitted in New York). Last reviewed: 08/14/2026
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New York Estate Planning Frequently Asked Questions Frequently Asked Questions
Yes. New York imposes a state estate tax separate from the federal one. For deaths between January 1 and December 31, 2026, the New York basic exclusion amount is $7,350,000, according to the New York State Department of Taxation and Finance. Estates at or below that figure generally owe no New York estate tax.
Under New York Tax Law § 952(c), the credit that offsets the estate tax phases out for taxable estates between 100% and 105% of the basic exclusion amount, and no credit at all is allowed where the New York taxable estate exceeds 105% of that amount. Above that point the entire estate is taxable rather than only the amount above the exclusion. For 2026, the 105% point is $7,717,500.
$7,350,000 for deaths occurring between January 1 and December 31, 2026, up from $7,160,000 for deaths in 2025. The amount is indexed and published by the New York State Department of Taxation and Finance by date of death.
The thresholds differ substantially — $7,350,000 in New York against $15,000,000 federally for 2026 — and so does the mechanism. Federal estate tax applies to the amount above the exclusion. New York's credit is eliminated once the taxable estate exceeds 105% of the exclusion, at which point the whole estate is taxed.
Yes, and this is the common situation. An estate above New York's $7,350,000 exclusion but below the $15,000,000 federal exclusion may owe New York tax while owing nothing to the IRS.
New York does not impose a separate gift tax, but it adds certain gifts made within a look-back period before death back into the New York gross estate, subject to statutory exceptions. Because gifting is the most common response to the cliff, the interaction between the look-back and the cliff should be reviewed before any transfers are made.
It depends on what you own and your circumstances. A will is simpler and is the only document naming guardians for minor children. A trust addresses management if you become unable to act and can allow distributions to be staged, but governs only assets transferred into it. Where an estate is near the New York threshold, the structure of the plan can matter more than the choice between the two.
It is the New York court that handles estates, with a separate court in each county. A will is offered for probate there and, if admitted, the court issues letters testamentary to the executor. Where there is no will, letters of administration are issued instead. Those letters are what authorize someone to act for the estate.
It should be reviewed. New York's execution formalities, its statutory power of attorney form, the spousal right of election, and the state estate tax all differ from other states' rules. Domicile also determines whether New York's estate tax reaches your full estate.
New York's intestacy rules determine who inherits, which may not match what you would have chosen, and Surrogate's Court appoints an administrator. Where minor children are involved, the court decides guardianship without your stated preference. There is also nothing in place naming who manages your affairs if you become unable to act during life.
