NYC resident income tax
New York City residents pay a city income tax, at graduated rates of roughly 3% to just under 4%, on top of state tax. It applies based on where you live, not where you work. Commuters who live in New Jersey, Long Island, Westchester or Rockland don't pay city income tax on wages earned in the city.
Business taxes in the city
- Unincorporated business tax (UBT): sole proprietors, partnerships and LLCs taxed as partnerships that carry on business in the city generally owe a 4% UBT on city business income, with credits that reduce or eliminate it for smaller businesses.
- S corporations: New York City doesn't recognize S status, so S corporations doing business in the city pay the city's corporate tax as if they were C corporations.
- City PTET: entities that elect New York State's pass-through entity tax can also elect the New York City PTET, which can benefit owners who are city residents.
Moving out of the city
In the year you move, you'll generally file as a part-year city resident. Keeping an apartment in the city can raise the same statutory residency questions New York State asks, so plan the move carefully. See our page on New York residency audits.
Frequently asked questions
Do I pay NYC income tax if I work in Manhattan but live in New Jersey?
No. New York City income tax applies to city residents. You'll pay New York State tax on New York-source wages, with a credit on your New Jersey return.
Does my LLC owe the NYC unincorporated business tax?
If it's taxed as a sole proprietorship or partnership and carries on business in the city, it generally must consider the UBT. Smaller businesses often owe little or nothing after credits.
Does New York City recognize my S election?
No. S corporations doing business in New York City are subject to the city's corporate tax.
Should I elect the NYC PTET?
It can reduce federal tax for owners who are city residents, but it requires electing the New York State PTET too. We'll model whether it helps.