With the approval of the Executive Budget for 2015-16, several changes to the New York State estate tax law took effect. These changes amend the significant revamping of the state estate tax system from the year before. The legislation applies the new estate tax exclusions for all individuals who die after April 1, 2014, rather than only those who die within a year. It also clarifies the three-year gift add-back provision.
In 2014, the estate tax exclusion amount increased from $1 million to $2,062,500 for individuals dying between April 1, 2014, and March 31, 2015; to $3,125,000 for individuals dying between April 1, 2015, and March 31, 2016; to $4,187,500 for individuals dying between April 1, 2016, and March 31, 2017; and to $5,250,000 for individuals dying between April 1, 2017, and December 31, 2018. For individuals dying on or after January 1, 2019, the New York State estate tax exclusion amount will equal whatever the federal exclusion amount is at such time.
One important change is that the estate tax rate schedule now applies to the estates of all decedents dying after April 1, 2014, rather than only those individuals dying between April 1, 2014, and March 31, 2015. All estates will be subject to this new estate tax rate schedule where the estate tax rate ranges from 3.06% to 16% based upon the size of the decedent’s estate.
The 2014-15 budget included a provision requiring taxable gifts made within three years of a decedent’s date of death to be “added back” to his or her gross estate and possibly taxed if the decedent was a NY resident at the time of the gift and at death. As enacted, this provision would only apply to gifts made before January 1, 2019. This year’s amendment simply clarifies the obvious and provides that the gift add-back does not apply to individuals dying on or after January 1, 2019.
If you have any questions about either the federal estate tax or New York estate tax, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com for a FREE consultation. Call 212-490-0704.
