New York follows the IRS on what's taxable
The Tax Department's 2014 technical memorandum on virtual currency (TSB-M-14(5)C, (7)I, (17)S) says New York follows the federal treatment of crypto as property. Your New York return also starts from your federal adjusted gross income, so:
- Gains and losses from selling, trading or spending crypto are the same numbers as on your federal return, using the same cost basis.
- Losses follow the federal rules. Net capital losses can offset up to $3,000 of other income each year, and the rest carries forward. (New Jersey is far stricter; see how New Jersey taxes crypto.)
- Staking, mining and airdrop income that's taxable federally is included in New York income too. See staking, DeFi, mining and NFT taxes.
State, city and Yonkers: what you pay on a gain
- No lower rate for long-term gains. New York taxes gains at the same graduated rates as wages, up to 10.9% at the very top. Holding a coin for more than a year lowers your federal rate, but not your New York rate.
- New York City residents also pay city income tax on the same gains, at rates from 3.078% to 3.876%. At higher incomes, state and city tax together can take more than 10% of a gain, before federal tax. See New York City taxes.
- Yonkers residents pay a resident surcharge figured as a percentage of their New York State tax, so a crypto gain raises it too.
Who New York taxes on crypto
- Residents are taxed on all their crypto gains, wherever the coins or exchange are located.
- Statutory residents: even if your home is elsewhere, you're taxed as a New York resident for the year if you keep a permanent place to live in New York and spend more than 183 days in the state. That brings your crypto gains into New York tax.
- Nonresidents, such as New Jersey residents who commute into Manhattan, are taxed on New York-source income like wages earned there. Gains from selling investments such as crypto generally aren't New York-source unless they come from a business carried on in New York, so your home state taxes them instead. More on NJ and NY multi-state taxes.
Moving out of New York before a big sale
A gain belongs to the state where you live when you sell. If you genuinely move out of New York and sell afterward, New York generally can't tax that gain, and New York's own advisory opinions have reached that result for investment sales completed after a move. Three cautions:
- The accrual rule. When you change residence, New York pulls into your final resident period any income you'd already become entitled to before the move, even if it's paid later, such as installment sale gains.
- Interests held through a partnership or fund can be treated differently from coins you hold directly.
- Residency audits. New York looks closely at moves timed around large gains: where your home is, where you spend your days, where your family and important belongings are. The move has to be real and well documented. See New York residency audits.
Mining, staking or trading as a business in New York City
If your crypto activity rises to the level of a business carried on in New York City, the city's Unincorporated Business Tax may apply on top of income tax. Trading for your own account generally has an exemption, but how it applies to digital assets isn't fully settled, so this is worth reviewing before the year closes.
Paying with crypto: sales tax
Under the same memorandum, crypto itself isn't subject to New York sales tax, but using it to buy taxable goods or services is treated as a barter: sales tax is still due on what you buy, based on its value in dollars. Separately, spending crypto is a disposition for income tax, so it can also create a gain or loss.
Form 1099-DA and your New York return
Because New York starts from your federal figures, an error on your Form 1099-DA, such as missing cost basis on coins moved between exchanges, overstates your New York and New York City tax as well. For coins bought in 2026 and later, exchanges now report cost basis to the IRS; older coins and self-custody wallets still depend on your own records. If your history is incomplete, we start with cost basis reconstruction.
Frequently asked questions
Does New York tax cryptocurrency gains?
Yes. New York follows the federal treatment of crypto as property (technical memorandum TSB-M-14(5)C, (7)I, (17)S), so gains from selling, trading or spending crypto are included in New York income, at the same rates as wages.
Does New York City tax crypto too?
Yes, for city residents. New York City residents pay city income tax on crypto gains and other income, up to 3.876%, on top of state tax. Yonkers residents pay a surcharge figured as a percentage of their state tax.
Can I deduct crypto losses in New York?
Yes, on the same terms as the federal return. New York starts from federal adjusted gross income, so up to $3,000 of net capital loss can offset other income each year and the rest carries forward.
I work in New York but live in New Jersey. Does New York tax my crypto gains?
Generally no. New York taxes nonresidents on New York-source income such as wages earned there, and gains from selling investments like crypto aren't New York-source unless they come from a business carried on in New York. Your home state taxes them instead.
If I move out of New York before selling, does New York still tax the gain?
Generally not, if you've genuinely changed your residence before the sale. New York taxes gains realized while you're a resident, and its accrual rule pulls in income that was fixed before the move. Moves timed around large gains are a common reason for New York residency audits, so the move has to hold up.