New York tax debt help: dealing with the Tax Department
The New York State Department of Taxation and Finance collects state income tax, and it uses some tools the IRS doesn't, like suspending your driver's license. Here's what to expect and how to resolve it.
1How New York collects
- Tax warrants: New York's version of a tax lien, filed with the county clerk and public record.
- Income executions: a wage garnishment, where your employer withholds part of each paycheck.
- Bank levies: money taken from your bank accounts.
- Driver's license suspension: New York can suspend your license if you owe past-due tax above a set amount and haven't made arrangements to pay.
- Refund offsets: state refunds can be applied to what you owe.
2Your options with New York
- Installment payment agreement: monthly payments, which many people can request online through their New York State Online Services account.
- Offer in compromise: New York has its own program for settling for less in some situations.
- Penalty relief: some penalties can be reduced for reasonable cause.
- Hardship: collection may be adjusted if paying would cause serious financial hardship.
3What to do now
- Check your account in New York State Online Services to see balances and notices.
- File any missing New York returns.
- Respond to any license suspension notice quickly. It gives you a deadline to act before the suspension takes effect.
- Plan for the IRS too, if you owe federal tax for the same years.
Common questions
Does an IRS payment plan stop New York?
No. The New York Tax Department is separate from the IRS, so you need a separate resolution with the state.
Does New York City have its own income tax?
New York City residents pay city income tax, but it's collected by New York State with your state return, so it's part of the same state balance.
Can someone represent me with New York?
Yes. With a New York power of attorney (Form POA-1), an authorized representative such as an Enrolled Agent can deal with the Tax Department for you.
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Written by Jonathan Samuel, EA. This page is general information, not advice for your specific situation. New York rules change; check tax.ny.gov for current details.