Viewing a single comment thread. View all comments

parkerpyne t1_j9f32aq wrote

Reply to comment by PostPostMinimalist in PSA: New York State tax brackets are not what they seem by PostPostMinimalist

>As for the top rate claim, that one is spelled out the most explicitly. Look at tax computation worksheet 6.

Well, sure: "If your New York adjusted gross income (line 33) is more than $25,000,000...". While not poor, I am still a wee bit away from that.

The numbers aside, I do find it strange that at this income state tax becomes flat at the marginal rate.

>Are you less than 50k above the start of a new bracket (and a bit different single vs married).

It's more than 50k in my case. I actually just noticed that yesterday I was looking at the married table rather than the one for head of household. That only changes where each bracket begins and ends however. My effective tax rate in NY still does not correspond to any of those rates and is below the marginal one.

You seem to have done some research on how it works but I remain doubtful that what you were saying is true. I am looking at tax computation worksheet 2 (from https://www.tax.ny.gov/forms/html-instructions/2022/it/it203i-2022.htm#tax-computation) which makes references to recapture base amount and incremental benefit amount. I suspect these numbers are used as a sort of mini-progression within the marginal bracket of 6.25% whereby your taxable income gets adjusted a bit depending on how much your income was above $161,500. That multiplier from line 8 is at most 1 which means that the taxable income will not get reduced if your income is $50k or more above the entry amount for that bracket.

If it was really as simple as you said (above $107,650 you pay a flat tax on all income) then this convoluted calculation wouldn't be required.

2

PostPostMinimalist OP t1_j9f576d wrote

As I said in the original post, there is a sliding scale above each bracket for the next $50k where you move up to full marginal tax at the next bracket. That’s why it needs to be complicated, because within that $50k it isn’t so simple.

Also where are you getting the effective rate from? The W2 doesn’t show what you actually owe, just what was withheld, so who is telling you?

The numbers appear as magic, but they aren’t, they are calculated exactly to achieve this effect. I know because I checked explicitly.

1