The New York State Department of Taxation and Finance recently issued a Technical Memorandum explaining the 2015 legislative amendments to the major New York State estate tax reform provisions enacted in 2014 and reported on this blog last year. The amendments are all effective retroactive to April 1, 2015.

The amendments made clear that the following tax tables are permanent.

Basic Estate Tax Exclusion Amount increases are to be phased in as follows for New York residents or non-residents owning real property located in New York State during the period listed:

  • April 1, 2014 – March 31. 2015: $2,062,500;
  • April 1, 2015 – March 31, 2016: $3,125,000;
  • April 1. 2016 – March 31, 2017: $4,187,500;
  • April 1, 2017 – December 31, 2018: $5,250,000;
  • January 1, 2019 and beyond: the basic exclusion amount corresponds with the Federal exemption ($5,000,000 indexed for inflation beginning in 2010).

Gift Add Back

Lifetime taxable gifts (in excess of the $14,000 annual exclusion per donee) made by a New Yorker during the 3 year period before his or her death to the extent such gifts are made between April 1, 2014 and December 31, 2018 are “added back” to the decedent’s estate. The New York State Technical memorandum clarifies that gifts are not added back to the gross estate to the extent that they consist of real or tangible personal property located outside of New York State and they will not be added back in the computation of the gross estate for estates of individuals who dies or after January 1, 2019.

Disallowance of Federal Deductions Relating to Intangible Personal Property for the Estates of Nonresidents.

The final issue discussed in the Technical Memorandum clarifies that for nonresidents who die on or after April 1, 2014, the computation of a New York taxable estate will not include any intangible personal property otherwise inducible in the New York gross estate of such nonresident. Thus, the federal deduction related to such intangible personal property should also be excluded in the computation of the New York State estate tax for a New York nonresident. If you are the executor of an estate of a nonresident who died after April 1, 2014 and on or before March 31. 2015 and you have filed a New York State estate tax return including such deduction, you need to file an amended return. It is worth emphasizing that there will be no New York state estate tax imposed on a nonresident of New York if the value of such individual’s New York situs property does not exceed the applicable New York estate tax exemption amount (currently $3,125,000) in the year of such individual’s death.