What Gift Taxes Apply in New York?

New York does not impose a state-level gift tax law. However, there is a federal-level gift tax, which may indirectly affect how the state’s estate taxes apply to your estate. Without further introduction, please follow along to find out the gift taxes that may apply to New York residents and how a proficient estate planning attorney in Putnam County, at the Law Office of Andres D. Gil, PLLC, can help you adopt the necessary strategies for an effective estate plan.

What gift taxes apply to New York residents?

Like other states, New York residents may be subject to federal-level gift taxes. In 2025, the annual exclusion amount is $19,000 per recipient. Or, married couples may make gifts of up to $38,000 per recipient. This is to say that anything above this amount must be reported to the Internal Revenue Service (IRS).

Then, the lifetime gift tax exemption is $13.99 million. In other words, this is the total amount you can gift throughout your lifetime without having to pay the federal-level gift tax. Otherwise, you may be subject to a tax rate of anywhere between 18 to 40 percent, depending on the exact amount you exceeded this enforced lifetime limit.

What gifting strategies should I consider as a New York resident?

If you are one part of a married couple, you may think of adopting a gift-splitting strategy for annual exclusion amount purposes. With this, you and your spouse may combine your gifts to one recipient and subsequently give them more. For example, instead of giving a recipient $35,000 and having to report it to the IRS, you may gift $17,500 and your spouse may gift the other $17,500 to still fall under the exclusion amount.

For the lifetime gift tax exemption, you may educate yourself on the types of gifts that are excluded from the total calculated amount. This is so you may strategize on how to gift your recipients in different ways. For example, instead of transferring money to their personal checking account outright, you may want to make a payment directly to their educational institution and pay for their tuition. Or, make a payment directly to their medical provider to cover their outstanding medical bills.

Going back to annual gifting, you should be aware of New York’s clawback rule. This law holds that any gifts made within three years of your unfortunate passing may be added back to your estate to calculate the New York estate tax. With that, for 2025, the New York estate tax exemption is $7.16 million. So, this clawback may ultimately send your estate’s value over the edge. This is to recommend gifting more earlier in your lifetime rather than later.

In conclusion, if you need help with executing this, do not be afraid to reach out to a talented estate planning attorney in Putnam County. Our team at the Law Office of Andres D. Gil, PLLC, is more than capable and eager to assist you with your plan.