New York State and City income tax for Brits

Back home the taxman takes one bite; in New York City you pay income tax to Washington, to Albany and to the city itself.

The short version

If you live in one of the five boroughs, you pay US federal income tax, New York State income tax and New York City income tax on the same salary [1][2].
New York State rates run from 4% to 10.9%, and the city adds 3.078% to 3.876%, with the top city rate reached at just US$50,000 of taxable income for a single person [2][3].
You're a New York resident if your home is here, or if you keep a permanent place to live here and spend 184 days or more in the state [1].
Commuters from New Jersey or Connecticut pay New York State tax on their New York wages but no city tax [1].
The UK–US tax treaty covers federal tax only, so state and city tax can bite where you'd expect the treaty to help [4][5].

How the three layers stack up

The US has no single "PAYE and done" system. Your employer withholds federal, state and city tax from each pay packet, plus Social Security (6.2% up to an annual cap) and Medicare (1.45%), together called FICA. Then you file separate federal and state returns each spring; the city tax goes on the state return.

Layer	Who collects it	Rates	Return
Federal income tax	IRS	10% to 37%	Form 1040 (1040-NR or dual-status in some years)
New York State income tax	NYS Department of Taxation and Finance	4% to 10.9%	IT-201 (residents) or IT-203 (nonresidents and part-year)
New York City income tax	Collected by the state on the same return	3.078% to 3.876%	Part of IT-201 or IT-203
FICA	IRS, through payroll	6.2% + 1.45%	Withheld by your employer

Sources: New York City Comptroller [3]; NYS IT-201 instructions [2]. State rates are for the 2025 tax year.

A few things that surprise Brits:

The city's top rate kicks in early. A single person pays 3.876% on city taxable income above US$50,000 (about £37,100), and the rates haven't changed since 2017 [3]. Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = USD 1.3476).
State rates are changing a little. New York's 2025 budget trims the rates on the first five state brackets by 0.2 percentage points in total over two years, starting with 2026, and extends the higher rates on top earners for five more years [6]. The 10.9% rate only applies to very high incomes.
There's a payroll tax on the self-employed. If you freelance and your net self-employment earnings in the Metropolitan Commuter Transportation District top US$50,000, you also owe the MCTMT, at 0.60% in the city and nearby counties [2].

As a rough feel, a single Brit on a decent Manhattan salary often finds the combined marginal rate on the next dollar lands somewhere in the mid-30s per cent before FICA. That's broadly what a higher-rate taxpayer in London pays once National Insurance is added. The difference is the paperwork, which is a proper faff.

Are you a New York resident?

Residence decides whether New York taxes all your income or just the part earned here. The state has two tests [1]:

Domicile. Your domicile is your permanent home, the place you intend to return to. If you've moved to New York for good, it's here. Changing domicile needs clear and convincing evidence that you've left one home and set up another.
Statutory resident. Even if your domicile is elsewhere, you're a resident if you keep a permanent place of abode in New York State for substantially all of the year and spend 184 days or more in the state. Any part of a day counts as a day.

The city uses the same two tests for its own tax: domicile in the city, or a permanent place of abode in the city plus 184 days there [1]. So someone with a flat in Manhattan who works in London half the year can still be caught.

The year you arrive

In your first year you're usually a part-year resident and file Form IT-203, with New York taxing your income from the date you became a resident plus any New York income before that [2]. On the federal side you may file a dual-status return. Back home, you'll want to leave the UK tax system cleanly, usually with split-year treatment so your UK tax year ends when you go. Our guides to split-year treatment and the Statutory Residence Test explain how. Remember to send HMRC a P85 if you're leaving a PAYE job.

Commuting from New Jersey or Connecticut

Plenty of Brits with children end up in Montclair, Hoboken or Greenwich and take the train in. The rules [1]:

No New York City tax. "Nonresidents of New York City are not liable for New York City personal income tax." The old commuter tax on non-residents ended in 1999 [3].
New York State still taxes your New York wages. As a nonresident you pay New York tax on New York source income, which includes pay for work done in New York State and income from New York property. You file Form IT-203.
Your home state taxes you too, then gives a credit for the New York tax on the same income. You won't be taxed twice in full, but you'll file at least two state returns.
Working from home doesn't automatically help. If your main office is in New York, days you work from home in New Jersey generally still count as New York working days, unless your employer has set up a genuine office where you telecommute. This is the "convenience of the employer" rule, and it catches many hybrid workers.

Living in Yonkers brings its own city surcharge, and other states have their own quirks, so check before you sign a lease.

Where the UK–US treaty doesn't reach

The UK–US double taxation convention has been in force since 2003 [4]. It covers US federal income tax, not state or city taxes. That matters in two ways:

Foreign tax credits. Federally, you can usually claim a credit for UK tax paid on UK income, such as UK rent. New York's resident credit is for tax paid to other US states and similar jurisdictions [1], so UK tax on that income generally doesn't reduce your New York State or City bill. You can end up paying more in total on UK rental income than you'd expect.
Treaty exemptions. Where the treaty stops the US taxing something, New York doesn't necessarily follow it. New York starts from your federal figures, so anything the IRS taxes, like ISA interest and dividends, is usually taxable in New York too.

If you keep a UK flat and rent it out, you'll also have the UK side to manage: UK tax through the Non-Resident Landlord Scheme, and US federal plus New York tax on the same rent. Our guide to ISAs, UK pensions and PFICs covers the investment traps, and a tax adviser who knows both countries can check your situation.

Getting it right in practice

Check your withholding on the W-4 (federal) and IT-2104 (state) when you start a job. If you live in the city, make sure city tax is being taken off too.
Keep a day count if you split time between New York and elsewhere. A diary, travel records or a simple spreadsheet will do; the 184-day test leaves no room for guesswork.
File on time. Federal and New York returns are normally due on 15 April for the previous calendar year. The US tax year runs January to December, unlike the UK's 6 April year.
Keep UK records of rent, interest and pension income in a form that converts easily to dollars and to a calendar year.
Tell HMRC you've gone, and keep your UK tax affairs tidy: our guide to leaving the UK and the P85 has the steps.

If your partner is American, our sister site ExpatStateside explains state taxes after you move abroad, handy if you might one day move to the UK together and need to shake off New York residence. For tips from people who've done a few New York tax seasons, ask in our community group for Brits in the US.

New York State and City income tax: the three-layer tax bill Brits don't expect