What is the New York estate tax exemption?

New York's basic exclusion amount is the value an estate can pass free of state estate tax. It is indexed for inflation each year and is well below the much larger federal exemption. Estates below the exclusion owe no New York estate tax at all.

What is the New York estate tax cliff?

The cliff is New York's most punishing feature. If a taxable estate exceeds 105% of the exemption, the exclusion phases out completely and the entire estate, not just the amount above the threshold, becomes subject to tax. A small increase in estate value near the cliff can trigger a large jump in tax.

How is New York estate tax different from federal?

New York has its own estate tax with a much smaller exemption than the federal estate tax and its own graduated rates running from about 3.06% up to 16%. An estate can owe New York tax while owing no federal estate tax, because it falls between the two exemption levels.

Does New York have an inheritance tax?

No. New York imposes an estate tax, paid by the estate before assets are distributed, but it does not have a separate inheritance tax charged to the people who receive the assets. Some other states levy inheritance tax on heirs; New York does not.

How can I avoid the New York estate tax cliff?

Common strategies include lifetime gifting to keep the estate below the threshold, charitable bequests that reduce the taxable estate, and careful planning by spouses to use both exemptions. Because the cliff is so steep, estates near the threshold often benefit most from professional estate planning advice.

What is the New York Estate Tax Calculator?

Estimate New York State estate tax using the current basic exclusion amount and graduated 3.06% to 16% rate schedule. Models the notorious New York estate tax cliff, where estates above 105% of the exemption lose the exclusion entirely. It runs free in your browser on Gera Tools, with nothing uploaded.

New York Estate Tax Calculator

Name: New York Estate Tax Calculator
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

In most tax systems, earning one more dollar costs you cents. In New York’s estate tax, one more dollar near the threshold can cost the estate hundreds of thousands — because New York does not tax the excess over its exemption, it takes the exemption away entirely once an estate crosses 105% of the basic exclusion amount. That “cliff” makes New York’s estate tax uniquely unforgiving among the minority of states that still levy one. This calculator locates your estate in one of the three zones — exempt, phase-out band, or over the cliff — and estimates the tax from the state’s graduated 3.06%–16% schedule.

The three zones

estate ≤ exemption            → no NY estate tax
exemption < estate ≤ 105%     → exclusion phases out; tax ramps up violently
estate > 105% of exemption    → exclusion fully lost; the ENTIRE estate is taxable

The tool pre-fills a recent basic exclusion amount ($6.94 million, the 2024 figure) and lets you override it — New York indexes the exclusion annually, so pull the current year’s number from the New York State Department of Taxation and Finance when planning.

The graduated schedule the tool applies

Once an estate is taxable, New York applies a base-plus-rate bracket table. Selected rows (as modeled):

Taxable estate over	Base tax	Rate on excess
$0	$0	3.06%
$500,000	$15,300	5.6%
$1,000,000	$43,300	6.4%
$3,000,000	$195,300	10.4%
$5,000,000	$423,300	12.8%
$7,000,000	$687,300	14.4%
$9,000,000	$983,300	16.0%
$10,100,000	$1,159,300	16.0%

Worked example: the cliff in dollars

With a $6.94M exemption, the 105% cliff sits at $7.287M.

$6.90M estate → below the exemption → $0 New York estate tax.
$7.30M estate → over the cliff → the whole $7.3M is taxable. From the table: $687,300 + 14.4% × ($7,300,000 − $7,000,000) = $730,500.

Read that pair again: the second estate is only $360,000 larger, yet it owes $730,500 more tax — the marginal “rate” on the dollars that crossed the cliff exceeds 200%. Inside the narrow 100%–105% band the exclusion phases out so quickly that the effective marginal rate is already far above 100%. No other feature of state tax law produces numbers like this, which is why New York estates near the threshold buy more planning per dollar than almost any other taxpayer.

Federal vs. New York: the gap estates fall into

The federal estate tax exemption is several times larger than New York’s (the federal figure has been in the eight-figure range in recent years — see the IRS estate tax page). The practical consequence: a very common New York estate — a paid-off brownstone, retirement accounts, life insurance — can owe zero federal estate tax while owing New York six figures. People consistently under-count their taxable estate by forgetting life-insurance death benefits (includable if the deceased owned the policy) and pre-tax retirement balances.

Planning levers that actually move the needle

Lifetime gifting below the threshold — with the caveat that New York adds back certain gifts made within three years of death, so deathbed gifting does not defeat the cliff.
Charitable bequests reduce the taxable estate dollar-for-dollar and can pull an estate back under the cliff — near the threshold, a bequest can increase what heirs receive.
Spousal planning: the unlimited marital deduction defers tax to the second death; credit-shelter structures use both spouses’ exclusions. New York does not have federal-style portability, which makes the planning documents matter more, not less.

Sources

Estimate only, not legal or tax advice. The model applies the published bracket schedule to the full taxable estate once over the cliff and does not model the intra-band phase-out formula, marital or charitable deductions, gift add-backs, or the federal tax. New York’s exclusion changes annually — verify the current figure before planning. All figures stay in your browser.