Warning for Estimated Tax Payers: NYC Tax Rates Change

August 25, 2010

The New York City tax rates for taxable income over $500,000 have gone up for 2010.

Married filing jointly and qualified widow(er) is $18,028, plus 3.876% of excess over $500,000

Head of household is $18,098, plus 3.876% of excess over $500,000

Single, married filing separately, and estates and trusts is $18,122, plus 3.876% of excess over $500,000

Taxpayers subject to the new rate should not need to adjust their city withholding for tax year 2010 because the new tables provide the amounts required to be withheld in order for an employee to catch up on his or her total withholding for tax year 2010.

For those clients subject to estimated tax payments, no penalty will apply to any shortage in your April 15,2010 and June 15, 2010 estimated tax payments that relate to these changes. However, you must include the April 15, 2010 and June 15, 2010 payment shortfall amounts in your September 15, 2010 payment.

For more information, contact your Perelson Weiner partner.

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