New York Estimated Tax Payments | What You Need To Know

January, 03 2024 by Lisa Brugman, EA

Similar to the IRS, New York’s taxing agency, the New York State Department of Tax and Finance (NYS-DTF), expects to collect your owed taxes throughout the tax year. If you are a W-2 employee, this is usually done by your employer through your state withholdings as indicated on your IT-2104 (Form IT-2104 Instructions). If you are self-employed or have income from other sources, such as dividends or a brokerage account, you may need to pay estimated taxes to the NYS-DTF.

NYS-DTF expects estimated tax payments if you will owe $300 or more in state and local taxes. Much like the IRS, the NYS-DTF recommends that if your New York adjusted gross income (NYAGI) is more than $150,000 (MFJ) Married Filing Jointly or $75,000 if you are single or married filing separately, you should pay estimated taxes equal to the lesser of:

• 90% of the current year's NY tax liability, or
• 100% of the prior year's NY tax liability.

NYS-DTF for the tax year 2024 generally follows the same schedule as for the IRS federal estimated tax payments. The NYS-DTF expects that your payments will be related to your anticipated annual taxable income for 2024, and these payments should be made on a quarterly basis.

NYS-DTF considers that you, the taxpayer, will review your income throughout the year and make estimated payments accordingly. If you receive income other than on a W-2, as a NY state taxpayer, you should complete the estimated tax liability worksheet found in the Instructions for Form IT-2105 before each quarter’s payment. This will help to account for an increase in income.

• For 2024, your First Quarter estimated payment is due April 15, 2024, and is calculated at 25% of line 28 of the estimated tax worksheet.
• For 2024, your Second Quarter estimated payment is due June 17, 2024, and is calculated at 25% of line 28 of the estimated tax worksheet.
• For 2024, your Third Quarter estimated payment is due September 16, 2024, and is calculated at 25% of line 28 of the estimated tax worksheet.
• For 2024, your Fourth Quarter estimated payment is due January 15, 2025, and is calculated at 25% of line 28 of the estimated tax worksheet. (Note that the fourth quarter deadline is in the following tax year.)

So, how do I know how much to pay?

When your 2023 tax return was filed, if you had a balance due, the tax return had estimated payment vouchers, Forms IT-2105, attached. Each voucher lists the estimated payments based on 100% of that year’s tax liability.

• If you don’t have other income, you can verify your W-2 withholdings by looking at the amount that has been withheld for state taxes on your paystub and match it to the amount listed on Form IT-2104.
• If they match, then no payment needs to be made. If the withholdings are significantly different, then you may want to pay the difference by making an estimated payment.
• If you are self-employed or have other sources of income, then you will want to review what your income is to date. If it is going to be about the same as in 2023, then you can make the payment on the voucher. If it is substantially different, then you will want to adjust your estimated payment relative to your income. You can do this by using the worksheet in the Instructions for IT-2105.

How do I make a payment?

• Make sure you have created an account on the NYS-DTF website.
• Review or calculate your estimated payment amount as discussed above.
• Log into your NYS-DTF account and click on the Make a Payment button.
• Click on Estimated Tax Payment.
• Be sure to mark the correct tax year. In this case, we are speaking about 2024 estimated payments.
• Complete all of the requested information and submit.

You have now made an estimated payment.

If you are unable to make a payment online (which is the preferred method), then you can mail your estimated payment along with the correct Form IT-2105 voucher to the NYS-DTF.

 

What if I don’t want to make estimated payments AND I have W-2 or other income?

(This is not available for individuals with only self-employed income.)

• If you receive income where withholdings are collected and paid to the NYS-DTF, such as: W-2 income – you can adjust the withholding amount on your IT-2104 so that your employer withholds and remits more withholdings to the NYS-DTF.
  • Retirement distribution, Form 1099-R – you can request that the administrator withhold enough money for the taxes that will be due based on your anticipated tax bracket (see NYS-DTF Tax Tables).
  • Dividends, Form 1099-DIV – if you receive regular dividend payments, whether quarterly or annually, you can request that the broker withhold taxes according to your tax bracket.
    • Example: your taxable income is $64,950 MFJ which puts you in the 5.85% tax bracket.

Overall, if you receive income from any entity, you may want to consider asking if they can withhold and remit taxes to the NYS-DTF and local taxing agencies.

 

Best Practices:

• DO NOT combine payments for multiple tax years.
• DO NOT combine tax entities, i.e., your individual tax liability and an Irrevocable Trust tax liability, or state income tax and city income tax.
• DO make sure your payment is credited to the correct tax year, i.e., 2024.

If you are mailing your estimated payment to the NYS-DTF:

• DO make your check payable to NYS Income Tax.
• DO write your Social Security number on the check.
• DO write the tax year “20XX Form IT-2105” on the check.
• DO include the appropriate voucher with your payment.
• DO mail your timely payment to the address on the voucher.

It is important to make timely estimated payments if needed. If you do not make timely payments, you could be subject to penalties.

 

Possible Penalties could include:

• Failure to pay timely estimated payments.
• Making a late estimated payment.
• Underpayment of estimated taxes.

The NYS-DTF may add:

• The penalty amount of the federal short-term interest rate PLUS 5.5%, but not less than 7.5% of the unpaid tax (underpayment) due.

If you are still unsure if and when to make estimated payments and want help, you can look to a tax professional in your area or go to the IRS page: Choosing a Tax Professional. If you want peace of mind just in case of a future IRS or New York State audit, consider purchasing an Audit Defense membership here.