Just as we were getting used to the permanent federal estate tax changes enacted in 2013, the New York Legislature and Governor Andrew Cuomo made significant changes to New York’s estate tax and trust income tax laws. Once again, trusts and estates practitioners are required to adapt to an ever changing tax landscape. These new laws were signed into law by Cuomo, effective April 1, 2014, as part of the implementation of the 2014-2015 budget for New York. According to Cuomo, a key objective is to provide tax relief to New Yorkers and prevent them from leaving for states with more generous estate tax laws. This article summarizes the estate tax and trust income tax provisions in the new law. As described below, there are a few controversial provisions which put into question whether these new laws will ultimately have the effect of keeping New Yorkers from leaving.
Estate Tax Exclusion Amount
The major estate tax change adopted by the new legislation is an increase in New York’s basic exclusion amount over the next five years. In general, the basic exclusion is the amount that a New York decedent can pass to a non-spouse without being subject to a New York estate tax. Prior to the new law, this amount had long been $1 million.
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