Alert: Highlights of NYS Personal Income Tax Changes

New York State has decided to decouple from the Federal Tax Cuts and Jobs Act (TCJA) certain personal income tax changes for tax years 2018 and after.  This will allow you to still treat these items the same as prior to the TCJA.  They consist of the following:

New York State Itemized Deductions:

You will be allowed to itemize your deductions for New York State income tax purposes even if you choose not to itemize on your federal income tax return.  Therefore, you can still deduct, as itemized deductions, the following items which are either limited or not deductible for federal tax purposes:

  1. Total of your state and local real estate taxes paid that exceed the $10,000  federal limit.
  2. Casualty and theft losses are only deductible if they occur in a federally declared disaster area.  New York State will allow them regardless of where they occur.
  3. Miscellaneous deductions that are no longer allowed for federal purposes remain deductible by New York State. They are limited to two percent of your federal adjusted gross income consisting of un-reimbursed employee business expenses, job related education expenses, tax preparation fees, investment expenses, and union dues.

Alimony or Separate Maintenance Payments:

The Federal TCJA changed the treatment of alimony payments made under an agreement executed on or after December 31, 2018 to be non deductible by the payer and not to be reported as income by the recipient.  New York State has decided to leave it the same as it was prior to the TCJA.

Qualified Moving Expenses Reimbursement and Moving Expense Payments:

New York State decided not to follow the changes made by the TCJA pertaining to no longer allowing the moving expense deduction and the exclusion from income of moving expense reimbursements for tax years 2018 through 2025.  Therefore, you will be able to deduct both items on your New York State tax returns.

Section 529 College Savings Account:

The changes made by the TCJA for withdrawals that are allowed from a Qualified Tuition Program account established under IRC Section 529 are not being followed by New York State.  Consequently, any withdrawals to pay for kindergarten through 12th grade school tuition, from a New York 529 college savings account, will be considered a nonqualified withdrawal.

Jeffrey G. Cohen Jeffrey G. Cohen, CPA is the Partner-in-Charge of Tax Services at Grassi. With over 30 years of experience, Jeff specializes in serving companies within the Manufacturing and Distribution Industry, with an emphasis on the Food & Beverage and Pharmaceutical sectors. A leading tax expert in the New York Metropolitan area, Jeff has enabled his clients to realize significant tax savings through proper Income and... Read full bio