Verified against the NY Department of Taxation and Finance · Updated October 1, 2026
New York Estate Tax in 2026: The $7.35M Exclusion and the Cliff, Explained
New York taxes estates above $7,350,000 (2026) at graduated rates from 3.06%–16% — and, unlike every other estate-tax state, it takes the exclusion away once you are more than 5% over it. Past $7,717,500, the entire estate is taxed from the first dollar. That is the cliff, and it is why an estate a few hundred thousand dollars over the line can owe more in tax than the amount by which it went over.
Model the New York cliff with the Estate Tax CalculatorHow the cliff works, in numbers
Single decedent, dying in 2026, no deductions beyond the exclusion. Every figure is the calculator engine's output for that estate size:
| Taxable estate | NY estate tax | Why |
|---|---|---|
| $5,000,000 | $0 | At or under the exclusion |
| $7,350,000 | $0 | At or under the exclusion |
| $7,700,000 | $721,690 | Over the exclusion but within 5% — phase-out zone |
| $7,800,000 | $746,000 | Past the cliff: exclusion lost, whole estate taxed ($450,000 over, tax exceeds the overage) |
| $8,000,000 | $773,200 | Past the cliff: exclusion lost, whole estate taxed ($650,000 over, tax exceeds the overage) |
| $10,000,000 | $1,067,600 | Past the cliff: exclusion lost, whole estate taxed ($2,650,000 over, tax is below the overage) |
Read the $7,700,000 and $7,800,000 rows together: crossing from under the cliff to over it does not add a few thousand dollars of tax, it adds the tax on the entire estate. Between the exclusion and the cliff the statute phases the benefit out quickly, so the practical line for planning is the exclusion itself, not 105% of it.
What New York planners actually do about it
- A “Santa Clause” charitable formula in the will: if the estate would land just over the cliff, enough is left to charity to bring it back under, because a deductible gift that saves more tax than it costs leaves heirs with more, not less.
- Credit-shelter (bypass) trusts at the first spouse's death, since New York has no portability — the first spouse's $7,350,000 is used or lost.
- Lifetime gifts, timed carefully. New York has no gift tax, but taxable gifts made within three years of death are added back to the New York gross estate, so gifting works only with lead time.
- Deductions that the federal return already allows — debts, administration expenses, the marital and charitable deductions — each of which can move an estate from one side of the cliff to the other.
New York versus federal
The federal estate tax does not start until $15,000,000 per person in 2026, so every estate in the table above owes $0 federally. New York's tax is therefore the only one most seven-figure New York estates pay — and the return (ET-706) is due nine months after death together with a pro-forma federal Form 706, even when no federal tax is owed. Extensions of up to six months are available on Form ET-133.
Frequently asked questions
What is the New York estate tax exemption for 2026?
$7,350,000 per person for dates of death in 2026, indexed annually (it was $7,160,000 for 2025). It applies to the full taxable estate — New York is not a "tax only the excess" state once you are over it; see the cliff question.
What is the New York estate tax cliff?
If the taxable estate exceeds the exclusion by more than 5% — $7,717,500 for 2026 — the exclusion is lost entirely and tax is computed on the whole estate from the first dollar. An estate of $7,350,000 owes $0; an estate of $7,800,000 owes about $746,000, more than the $450,000 by which it exceeded the exclusion.
Does New York have portability or a gift tax?
Neither. A surviving spouse cannot inherit the deceased spouse's unused New York exclusion (unlike the federal DSUE), which is why credit-shelter trusts remain standard in New York planning. There is no New York gift tax, but taxable gifts made within three years of death are added back to the New York gross estate.
Related
The New York estate tax calculator page has the full bracket table and the statute; the highest-state-estate-tax comparison shows where New York's bill lands against the other twelve estate-tax jurisdictions; and the federal estate tax guide covers the $15,000,000 federal side.