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New York Estate Tax Provisions in Latest Executive Budget

Posted on: January 30th, 2015
new york tax planningThe New York State Executive Budget was issued in January 2015, and New Yorkers likely will want to watch their step near the “estate tax cliff” for the foreseeable future. Several other tax items were also addressed in the budget, which should prompt individuals to contact their tax and estate planning attorneys to ensure that estate plans are structured properly to address recent changes:
  1. As per budget terms, New York State estate tax portability remains a concern. Though revisions were made to New York’s estate tax laws nearly a year ago, they did not provide for spousal portability. Currently, if a married person fails to use their exemption before they pass away, their spouse will not be able to benefit from the unused exemption.
  2. Since the estate tax cliff remains, an attorney can advise ways to structure assets to minimize or eliminate the effect of the cliff. As the law stands, only estates valued up to 105% of the exemption (currently $2,062,000 as of this writing) will enjoy tax benefits.
  3. Deductions related to intangible personal property for non-resident estates will not be permitted.
  4. The state tax rate table will now apply to individuals who die after March 31, 2015. Previously, some tax provisions were set to expire then.
  5. The gift add back provisions will now be excluded from estates where the decedent died after January 2, 2019.
  6. These tax law changes will likely encourage a new approach to New Yorkers’ estate plans, both for individuals and businesses. Many more provisions were included in the Executive Budget, including a net income tax reduction for small businesses and incentives for business tax credits. Check with a New York tax attorney to learn which provisions apply to you and how your estate plan should address these items.
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