Q: How will the FY2019 NY State Budget impact my after-tax income?

NY-SALT chart by income.png

Q: How will the FY2019 NY State Budget impact my after-tax income?

A: Details are still forthcoming, but for most of us, it means either a bit more money in our pocket, or no impact at all. Two items in the budget are designed to bypass the new Federal $10,000/year cap on deductibility of state and local income taxes (“SALT”), which we previously wrote about here and here. This only impacts you if you will itemize your Federal taxes; most people take the standard deduction. The two new budget items are (1) a way to donate to a “charity” and offset your property taxes by the same amount, because charitable donations are not subject to the $10k cap, and (2) a way to structure some NY State income taxes as a “payroll tax” paid by employers, rather than an “income tax” paid by employees, because the $10k cap only applies to individuals, not businesses. We previously wrote about payroll taxes here. NY’ers of means received the greatest benefit from the old SALT deduction, as you can see in the chart above. Hey, if you’re in a lower income group and will benefit to the tune of hundreds or even a couple thousand, that’s great. Personally, I’m fed up with a governor who prioritizes tax benefits for the wealthiest while not funding early voting, decriminalizing abortion, properly funding the subway…

-initially published in the 4/2/2018 newsletter

Stephanie Lee