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| Suzanne LoBiondo, CPA 516-791-1303
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| Chris Cheeseman, CPA 516-791-1303
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Dear Clients and Friends,
Spring is in the air! Birds are chirping, the bunnies have surfaced and the days are getting longer.
We hope you all enjoyed the holidays last week, and the beautiful weather we are finally starting to have.
We thank you for your business, and for your referrals during this past tax season.
Very truly yours,
Suzanne LoBiondo and Christopher Cheeseman
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NYS Budget Brings Changes to Estate Tax Law |
On March 31, 2014, Governor Andrew Cuomo signed legislation to implement the New York State fiscal plan for 2014 - 2015. The legislation makes broad changes to the New York State estate and gift tax laws.
Here are the highlights: Estate Tax:
Under the new law, beginning immediately and over the next five years, the NY estate tax exclusion amount (formerly $1 million) is increased incrementally until the NY exclusion matches the federal estate tax exemption, as follows:
For decedents on or after...
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And before...
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The exclusion amount will be...
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April 1, 2014
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April 1, 2015
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$2,062,500
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April 1, 2015
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April 1, 2016
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$3,125,000
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April 1, 2016
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April 1, 2017
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$4,187,500
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April 1, 2017
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Jan. 1, 2019
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$5,250,000
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Jan. 1, 2019
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Scheduled to equal the federal estate tax exemption
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However, the NYS tax exclusion is not the same as the federal tax exemption. While the federal exemption means that the first $5,340,000 (in 2014) will not be subject to any estate tax, the NYS exclusion means that any gross estate worth less than the exclusion amount will not have to file an estate tax return, but any estate worth more will have to file a return and will owe an estate tax on nearly every dollar. The top NY estate tax rate remains 16 percent. This means that wealthier individuals will still have an estate tax burden the same as they would have under prior law.
Married taxpayers may continue to take advantage of the NYS exclusion by funding credit shelter trusts on the death of the first to die. Gift Tax: NYS has also revived a form of gift tax. The tax will not be imposed at the time of the gift, nor will there be any reporting requirement. However, there will be a limited 3-year look back
period for gifts made between April 1, 2014 and Jan. 1, 2019. Specifically, if a NY resident dies within three years of making a taxable gift, the value of the gift will be included in the decedent's estate for purposes of computing the NY estate tax. The following gifts are excluded: (1) gifts made when the decedent wasn't a NY resident; (2) gifts made by a NY resident before April 1, 2014; (3) gifts made by a NY resident on or after Jan. 1, 2019; and (4) gifts that are otherwise includible in the decedent's estate under another provision of the federal estate tax law (that is, such gifts aren't taxed twice).
As always, feel free to contact us at 516-791-1303, or [email protected] with any questions.
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