NEW YORK STATE INCOME TAX REGARDING CAPITAL GAINS AND DIVIDENDS?

Does New York State regard long term capital gains and dividend distributions from taxable mutual funds of individuals as ordinary personal income or like the Federal gov't. does (reduced percentage tax rate.)? Federal income tax forms packets provide a worksheet for figuring this lower tax amount yet New York has no such provision. Thanks.

Public Comments

1. The former. NY taxes capital gains at the same rate as ordinary income. So do most other states. NY does not have a reduced rate for capital gains. However, capital gains are not taxed until you sell the capital asset. If, while you still own the asset, you move to another state, sell it, and then move back to NY, you can avoid the NY tax completely. To qualify, this must be a real change in domicile, not just a vacation or a temporary move for a college.