What Is the NYC Local Income Tax?
The NYC local income tax is a city-level tax imposed by New York City on the taxable income of its residents. It is completely separate from both the federal income tax and the New York State income tax — meaning New York City workers who live within the five boroughs pay three distinct layers of income tax on every paycheck: federal, state, and city.
This surprises many workers, especially those who move to New York from states like California, Texas, or Florida, where there is no equivalent city-level tax. When you see a deduction labeled "NYC Tax," "City Tax," or "NYC Local" on your paystub, that is the NYC local income tax being withheld by your employer on the city's behalf.
The tax is formally authorized under Article 30 of the New York City Administrative Code and is administered by the New York State Department of Taxation and Finance alongside the NY State income tax. You do not file a separate NYC-only return — the city tax is calculated and paid as part of your New York State resident tax return (Form IT-201).
Key Fact: NYC local income tax applies to residents of the five boroughs (Manhattan, Brooklyn, Queens, The Bronx, and Staten Island) regardless of where they work. If you live in NYC and work in New Jersey, you still owe NYC local income tax.
NYC Local Income Tax Rates for 2026
The NYC local income tax is progressive, meaning the rate increases as income increases. Unlike the federal tax brackets, NYC's local rates are relatively narrow in range — from 3.078% to 3.876% — but they still add a meaningful burden on top of federal and state taxes.
2026 NYC Local Tax Rates — Single Filers
| NYC Taxable Income | Tax Rate | Tax on This Bracket |
|---|---|---|
| $0 – $12,000 | 3.078% | Up to $369.36 |
| $12,001 – $25,000 | 3.762% | Up to $489.06 |
| $25,001 – $50,000 | 3.819% | Up to $954.75 |
| Over $50,000 | 3.876% | 3.876% on each dollar above $50,000 |
2026 NYC Local Tax Rates — Married Filing Jointly
| NYC Taxable Income (MFJ) | Tax Rate |
|---|---|
| $0 – $21,600 | 3.078% |
| $21,601 – $45,000 | 3.762% |
| $45,001 – $90,000 | 3.819% |
| Over $90,000 | 3.876% |
Note that "NYC taxable income" is generally your federal adjusted gross income modified for New York State and NYC purposes. Pre-tax deductions like 401(k) contributions, health insurance premiums under a Section 125 plan, and HSA contributions all reduce your NYC taxable income.
How to Calculate Your NYC Local Tax: Examples
Example 1: Single Filer, $75,000 NYC Taxable Income
Working through the brackets from the bottom up:
- First $12,000 × 3.078% = $369.36
- $12,001–$25,000 ($13,000) × 3.762% = $489.06
- $25,001–$50,000 ($25,000) × 3.819% = $954.75
- $50,001–$75,000 ($25,000) × 3.876% = $969.00
- Total NYC Local Tax: $2,782.17
That works out to an effective NYC local tax rate of about 3.71% on $75,000 of income.
Example 2: Single Filer, $100,000 NYC Taxable Income
- First $12,000 × 3.078% = $369.36
- $12,001–$25,000 ($13,000) × 3.762% = $489.06
- $25,001–$50,000 ($25,000) × 3.819% = $954.75
- $50,001–$100,000 ($50,000) × 3.876% = $1,938.00
- Total NYC Local Tax: $3,751.17
At $100,000, the effective NYC local rate is approximately 3.75%. Because the top bracket begins at just $50,001, most middle-class and upper-middle-class NYC workers are already paying close to the maximum marginal rate.
Example 3: Single Filer, $150,000 NYC Taxable Income
The total through $100,000 is $3,751.17. Adding the remaining $50,000 at 3.876%: $50,000 × 3.876% = $1,938.00. Total NYC Local Tax: $5,689.17 — an effective rate of 3.79%.
Who Pays NYC Local Income Tax?
NYC Residents: Yes, Regardless of Where They Work
If you maintain your primary domicile — your permanent home — within the five boroughs of New York City (Manhattan, Brooklyn, Queens, The Bronx, or Staten Island), you are an NYC resident for tax purposes and owe NYC local income tax on all of your income, regardless of where it is earned. This is the domicile rule, and it has important implications:
- An NYC resident who works remotely for a company headquartered in Seattle owes NYC local income tax on their full salary.
- An NYC resident who travels to work in Stamford, CT two days per week and works from home (NYC) three days per week owes NYC local income tax on all five days' income.
- An NYC resident who receives rental income from a New Jersey property owes NYC local income tax on that rental income.
Commuters: No NYC Local Tax
If you live outside New York City and commute into the city to work, you do not pay NYC local income tax. You will pay New York State income tax on your NY-sourced wages (since your income is earned in NY State), but the city tax applies only to residents. This means a worker living in Hoboken, NJ and commuting to Midtown Manhattan each day pays NY State income tax on Manhattan wages but not NYC local tax.
Commuter Note: NYC had a commuter tax from 1966 until 1999, when the state legislature eliminated it. Since 1999, only NYC residents pay the city's income tax — commuters who live in New Jersey, Connecticut, Westchester, or Long Island are exempt from the city levy.
The Yonkers Exception: New York's Other Local Tax
Within the greater New York area, Yonkers is the only other municipality that imposes a meaningful local income tax. The Yonkers resident income tax surcharge is structured differently from the NYC tax — rather than using its own brackets and rates, it is calculated as a percentage of your New York State income tax liability.
For 2026, the Yonkers resident surcharge is 16.75% of your NY State income tax liability. So if you owe $5,000 in NY State income tax, your Yonkers surcharge would be $837.50 on top of that. There is also a Yonkers non-resident earnings tax of 0.50% on wages earned within the city of Yonkers, applicable to people who work in Yonkers but live elsewhere.
Other cities in Westchester County — White Plains, New Rochelle, Mount Vernon, Yonkers excepted — do not have local income taxes. Similarly, cities on Long Island such as Hempstead, Babylon, and Oyster Bay have no local income tax despite their proximity to NYC.
NYC vs. New Jersey: The Most Common Cross-Border Question
Because so many workers live in New Jersey and commute to New York City jobs, the NJ-NYC tax interaction is one of the most frequently misunderstood aspects of the local tax system. Here is exactly how it works:
- NJ resident working in NYC: You pay NY State income tax on your NY-earned wages (withheld by your employer). You do NOT pay NYC local income tax. You file a NJ resident return and report all income, then claim a credit for income taxes paid to NY State. This credit prevents double taxation. Your effective cost is roughly the higher of the two state tax rates (NY State's higher rates tend to dominate).
- NYC resident working in NJ: You pay NJ income tax on wages earned in NJ (withheld by your employer). You also pay NYC local income tax on your full worldwide income (since you are an NYC resident). You file an NJ non-resident return for NJ wages and a NY State/NYC resident return for all income, claiming a credit on your NY return for taxes paid to NJ. This is generally less common but does occur.
How NYC Local Tax Withholding Works on Your Paycheck
If you live in NYC and provided an NYC address on your Form IT-2104 (New York State withholding certificate, which you file with your employer alongside the federal W-4), your employer should automatically withhold NYC local income tax from each paycheck. The amount withheld is calculated based on your annualized expected income and the applicable bracket.
If you moved to NYC mid-year and did not update your IT-2104 with your employer, you may have insufficient NYC withholding. In that case, you will owe the balance when you file your NY State/NYC return in April. If the underpayment is significant, you may also owe an underpayment penalty.
To avoid underpayment: update your IT-2104 immediately when you move into NYC. You can also make estimated tax payments directly to New York State (which administers the NYC tax) on a quarterly basis if your withholding is insufficient.
Where NYC Local Tax Appears on Your W-2
Your employer is required to report the NYC local income tax withheld on your annual Form W-2. Here is where to find it:
- Box 19: The dollar amount of NYC local income tax withheld during the year.
- Box 20: The name of the locality — this will show "NYC" or "New York City."
- Box 18: Wages subject to local tax withholding (which may differ from Box 1 federal wages if there are pre-tax deductions treated differently at the local level).
If you worked for multiple NYC employers during the year, each employer will issue a separate W-2, and each W-2 will show that employer's NYC withholding in Box 19. You add together all Box 19 amounts when completing your IT-201 resident tax return to determine your total prepaid NYC tax versus what you actually owe.
Brief History: Why Does NYC Have a Local Income Tax?
New York City's local income tax dates to 1966, when the city was facing a severe fiscal crisis. The Lindsay administration implemented the tax as part of a broader package of revenue measures to close a massive budget shortfall and fund city services. At the time, NYC was experiencing rapid population growth, increased demand for social services, and a declining manufacturing base that was eroding the city's property tax and business tax revenues.
The tax has been a permanent feature of NYC's revenue structure ever since — it survived even the more severe fiscal crisis of 1975 (when the city nearly declared bankruptcy) and the long economic boom that followed. Unlike the commuter tax, which was eliminated in 1999 under political pressure from suburban legislators, the resident income tax has proven far more durable.
Over the decades, the rate structure has been adjusted several times, but the fundamental design — a graduated tax on resident income — has remained constant. In recent years, the city has added the NYC School Tax Credit (a modest credit that phases out at higher incomes) and the NYC Earned Income Credit (which mirrors a portion of the federal EITC) as mechanisms to reduce the burden on lower-income residents.
NYC Local Income Tax vs. Other Major US Cities
NYC's local income tax is often assumed to be uniquely burdensome, but the reality is more nuanced. Many major American cities have local income taxes, and some are comparable to or even higher than NYC's rates:
| City | Local Income Tax Rate | Notes |
|---|---|---|
| New York City, NY | 3.078%–3.876% | Residents only; graduated brackets |
| Philadelphia, PA | 3.75% (residents) / 3.44% (non-res) | Flat rate; non-residents who work in Philly also pay |
| Baltimore, MD | Up to 3.2% | County piggyback tax; varies by jurisdiction |
| Detroit, MI | 2.4% (residents) / 1.2% (non-res) | Non-resident workers pay half rate |
| Columbus, OH | 2.5% | Flat rate; both residents and workers pay |
| Washington, DC | 4.0%–10.75% | DC is a city-state; rates are steep at high incomes |
| Chicago, IL | None | No city income tax |
| Los Angeles, CA | None | No city income tax; CA state tax is high |
| Houston, TX | None | No city or state income tax |
| Seattle, WA | None | Washington state has no income tax |
As this comparison shows, NYC's local tax is higher than most cities, but it is not uniquely extreme. Philadelphia's flat rate of 3.75% is actually slightly higher than NYC's effective rate for middle-income workers. Washington DC's rates are far higher at upper income levels. What makes NYC distinctive is the combination of the local tax on top of already-elevated NY State rates — the total combined burden for an NYC resident earning $200,000 can exceed 10% in state and local income taxes alone, before adding federal tax.
NYC School Tax Credit and Low-Income Offsets
NYC provides a few credits that partially offset the local income tax for lower-income residents. The most significant is the NYC School Tax Credit, which provides a fixed credit of $63 for single filers with NYC taxable income under $250,000 (the credit amount varies by filing status). While modest, it partially offsets the first-bracket tax for very low earners.
The NYC Earned Income Credit is 30% of the federal Earned Income Tax Credit for NYC residents who qualify. This can be a meaningful benefit for lower-income working families, effectively reducing their NYC local tax liability to near zero. Both credits are calculated on the IT-201 resident tax return.
Frequently Asked Questions
What is the NYC local income tax rate for 2026?
NYC uses four graduated brackets for single filers: 3.078% on the first $12,000; 3.762% on $12,001–$25,000; 3.819% on $25,001–$50,000; and 3.876% on income above $50,001. For a single filer earning $75,000 in NYC taxable income, the total NYC local tax works out to approximately $2,782.
Do I pay NYC local income tax if I live in New Jersey and commute to NYC?
No. NYC local income tax applies to NYC residents only. If you live in New Jersey (or any location outside the five boroughs) and commute to NYC to work, you pay NY State income tax on your NY-sourced wages but not NYC local tax. You will pay NJ income tax on your NJ resident return, with a credit for NY taxes paid.
Where does NYC local tax appear on my W-2?
NYC local income tax withheld appears in Box 19 of your W-2. Box 20 shows "NYC" as the locality name. All Box 19 amounts from all employers are totaled when you file your NY State/NYC resident return (Form IT-201).
Does Yonkers have a local income tax like NYC?
Yes. Yonkers residents pay a surcharge of 16.75% of their NY State income tax liability (2026). Other Westchester cities like White Plains and Mount Vernon have no local income tax. The Yonkers tax is separate from and in addition to NY State tax.
Data Sources: NYC local tax rates per NY Department of Taxation and Finance and NYC Administrative Code Article 30. Rate history from NYC Office of Management and Budget. See full methodology →
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