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Residency and estate tax returns

On Behalf of | Sep 16, 2020 | Estate Planning |

Whether your loved one recently passed away and you are unsure of how to approach tax matters or you are worried about the tax consequences of your own estate plan, you should have a clear understanding of relevant tax matters. From time requirements to tax rates, there are various issues to go over. However, people need to recognize how residency affects estate tax obligations.

In fact, the law sometimes requires nonresidents to file estate tax returns in New York, depending on their circumstances.

New York residents and estate tax returns

According to the New York State Department of Taxation and Finance, filing an estate tax return is necessary for the estate of a New York resident if the value of the decedent’s federal gross estate, as well as includible gifts, is greater than the basic exclusion amount ($5.85 million in 2020).

If you are unsure whether filing an estate tax return is necessary, look into the value of the estate carefully. Moreover, the law requires the executor of an estate to file taxes no more than nine months after the decedent dies.

Nonresidents and estate tax returns

The law also requires estate tax returns for estates belonging to those who are not residents of New York, in some instances. If a nonresident’s estate includes real property in New York and the value of their federal gross estate is greater than the basic exclusion amount, they must file an estate tax return in New York. Properly managing tax obligations related to an estate can help avoid penalties and unnecessary hardships.