Many New York residents assume only federal estate tax rules apply to their assets, and they are surprised to learn that the state imposes its own estate tax, as well. While there is no inheritance tax here, estate taxes can still significantly affect how much you can ultimately pass down to your designated beneficiaries, especially depending on your asset types, the timing of your lifetime gifts, and the value of your overall estate. This is not to mention that this state also has a unique “estate tax cliff,” which you must take into careful consideration. Without the need for further introduction, please follow along to find out the New York estate tax exemption and how one of the proficient Putnam County asset preservation attorneys at the Law Offices of Andres D. Gil, PLLC, can help you calculate this and ensure you fall below the allotted threshold.

What is the New York estate tax exemption, and how does the “estate tax cliff” work?

Of note, New York requires certain estates to pay a state estate tax if their value exceeds the given exemption amount at the time of death. This tax is paid from the estate before assets can be distributed amongst the named beneficiaries. And with this estate-tax system, the responsibility typically falls on the estate’s executor or personal representative.

With that being said, for 2026, the New York State estate tax exclusion amount is $7.35 million per individual. And so, the portion of the estate that exceeds this threshold may to subject to a tax rate that ranges between three percent and 16 percent.

But also, unlike federal estate tax rules, New York State imposes an estate tax cliff. Here, if the estate’s value exceeds the exclusion amount by more than five percent (i.e., it is worth $7,717,500 or more), then the entire estate, from the first to the last dollar, may be hit with these taxes. That is, it will not just apply to the amount over the exemption.

What types of assets are included when calculating the New York estate tax?

You may assume that your estate’s value is close to the state’s estate tax exclusion amount, but it does not pass it. However, this is tough to determine on your own, as this exemption total is adjusted periodically. What’s more, you may mistake a certain type of asset as being excluded from this calculation, when in reality it will be factored in. Below is a list of assets to consider:

  • Real estate properties in New York State’s borders.
  • Bank accounts, investment accounts, and retirement accounts.
  • Lifetime gifts that were made shortly before the time of your death.
  • Joint ownerships on titles, trusts, and beneficiary designations.

So, if you wish to gain more clarity on the situation you are dealing with, the best way to get it is by consulting with a talented estate planning attorney in Putnam County. Get in touch with our team at the Law Office of Andres D. Gil, PLLC, today.