NYS Tax Department highlights tax benefits and obligations related to major milestones
The New York State Department of Taxation and Finance today encouraged taxpayers to learn how major life events, such as marriage and retirement, can affect their taxes.
Welcoming a new family member or buying a home, for example, can mean more credits and deductions to help pay for added expenses.
“Getting married is an exciting time in a person’s life, so we understand that tax matters aren’t foremost on your mind,” said Acting Commissioner Nonie Manion. “However, once your life settles down, it’s important to learn how marriage affects the way you file your return and the steps to avoid any confusion, especially if you’ve changed your last name.”
If you changed your name as a result of a recent marriage, it’s important that the name on your tax return matches the name registered with the Social Security Administration. If they don’t match, it can cause processing delays and slow any refund you may be owed.
It’s also important to determine how marriage affects your filing status.
Raising children can be expensive, so don’t miss out on tax benefits that can improve your financial situation. For example, check your eligibility for the Child and Dependent Care Credit, Empire State Child Credit, and the Earned Income Credit.
“It’s important that you have the supporting documents to prove eligibility for these credits,” Manion added.
Being a homeowner offers tax advantages at both the federal and state level. The IRS allows you to deduct the expenses of owning a home, such as mortgage interest and interest paid on home improvement loans. Homeowners can deduct their real estate taxes, home office costs, and moving expenses from both their federal and state income taxes.
College costs can be daunting, but several programs are in place to ease the financial burden. NYS, for example, offers a College Tuition Credit or itemized deduction. Free tuition is also available under the Excelsior Scholarship program for income-eligible families and individuals who attend a SUNY or CUNY two- or four-year degree program. An Enhanced Tuition Awards program is also available.
Retirement is one of life’s great accomplishments with the added benefit of some tax rewards. Any social security benefits you included in federal adjusted gross income are exempt from state and local income taxes. These benefits may also be subtracted from federal adjusted gross income when computing New York adjusted gross income.
Also, qualified pension benefits or distributions you received from the United States, New York State, and local governments within New York State are exempt from New York State, New York City, and Yonkers income taxes regardless of your age.
If you were at least 59½ during the tax year, you can subtract up to $20,000 of pension and annuity income (married taxpayers who both receive pension income can each subtract up to $20,000). If you turned 59 ½ during the tax year you can only exclude the amount of pension and annuity income received on or after you became 59½, but not more than $20,000.
In addition, senior citizens (age 65 and older) with qualifying incomes may be eligible for an increased benefit—an “Enhanced STAR” exemption—for their primary residence.
For more information, see Publication 36 – General Information for Senior Citizens and Retired Persons and STAR eligibility.
Federal tax information