New York Revisits Estate Tax Laws

Last week, New York State’s Department of Taxation and Finance released a summary of amendments to New York’s estate tax that became effective April 1 with the enactment of the 2015-15 Executive Budget. 

Sharon Klein, managing director of family offices services and wealth strategies at Wilmington Trust, said that the summary included clarifications of language in the budget in addition to implications of several amendments.  Klein noted that the summary clarified that gifts were not added to the gross estate if they consisted of real or tangible property located outside New York. 

Under the new law, the New York estate tax computation contained an estate tax “cliff.”  Hence, estates that are less than or equal to the New York estate tax exclusion will not pay a tax.  However, the credit for New York taxable estates between 100% and 105% of the basic exclusion amount is phased out, and eliminated if the New York taxable estate exceeds 105% of the basic exclusion amount.  This means “if a resident decedent’s taxable estate exceeds the basic exclusion amount by more than 5%, the entire taxable estate will be subject to New York estate tax.” 

The summary further states that a federal estate tax return must be filed when a decedent’s gross estate exceeds the federal filing threshold, “and also when the federal return is the only means for claiming certain tax treatment.

See Michael S. Fischer, New York Revises Estate Tax Laws, Think Advisor, Sept. 3, 2014. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.