At a glance
- Corporate tax
- 6.5% (7.25% over $5M) + NYC 8.85%
- Tax on wages
- 3.9%–10.9%; NYC residents add 3.078%–3.876%
- Sales tax
- 4% state; 8⅞% in NYC
- Economic nexus
- Over $500,000 and over 100 sales
- Minimum wage
- $17.00 NYC area / $16.00 rest of state
- UI wage base
- $17,600
- New-employer UI rate
- 4.1%
- Paid leave program
- PFL 0.432% (max $411.91); DBL 0.5% (max $0.60/wk)
- Annual report
- Biennial statement, $9 every two years
2026 figures, each explained with its source on the area’s page. On top of the federal baseline.
Setup, in order
Qualify to do business
Before you start doing business in New YorkFile an Application for Authority with the Department of State ($225) with a Delaware certificate of good standing dated within a year. An LLC formed under a foreign country’s law also files a beneficial owner disclosure or attestation.
Open withholding and UI accounts
Before the first New York payrollRegister with the Department of Labor for unemployment insurance and with Taxation and Finance for withholding. Both feed the quarterly NYS-45.
Insure workers’ comp, DBL and PFL
Before the first hire; DBL/PFL within weeks of itBuy workers’ compensation and a disability (DBL) and Paid Family Leave policy from a carrier or the State Insurance Fund. DBL/PFL is required four weeks after you have had an employee on 30 days in a calendar year.
Report new hires and contractors
Within 20 calendar days of hireReport each new employee, and each contractor with a contract over $2,500, to the New York new-hire program.
Notices, leave policy and paydays
At hireGive new hires the pay notice and, in NYC, the Notice of Employee Rights for protected time off; set paydays at least semi-monthly (weekly for manual workers).
Register for sales tax
At least 20 days before taxable sales beginApply for a Certificate of Authority once you have a New York employee or office, or pass $500,000 and 100 sales in four quarters. SaaS is taxable.
Account for NYC corporate tax
First return due Apr 15 after year oneIf you do business in the five boroughs, the NYC Business Corporation Tax is a separate return (NYC-2) with the NYC Department of Finance.
Watch the MCTMT threshold
Each quarterTrack payroll in the commuter district each quarter; once it exceeds $312,500, file Form MTA-305.
The six areas
- AccountingAccounting and state tax in New YorkNew York taxes a C-corp three ways: the state franchise tax, an MTA surcharge in the commuter district, and in the five boroughs a separate NYC Business Corporation Tax. All three apportion by where customers are.State business income rate6.5% (7.25% over $5M)
- ReceivablesReceivables and sales tax in New YorkNew York taxes SaaS as prewritten software, at 4% plus local rates (8⅞% in NYC). Remote sellers register after $500,000 and 100 sales; a New York employee makes you a vendor at once.State sales tax rate4%
- PayablesPayables and contractors in New YorkNew York wants a written contract for freelancers and a new-hire report for contractors over $2,500. Untaxed software purchases owe use tax, and stale vendor checks escheat after three years.CF/SF participationNo
- PayrollPayroll taxes and employer rules in New YorkNew York payroll is state and city at once: one NYS-45 for withholding and UI, a disability and Paid Family Leave policy you buy from a carrier, the MCTMT in the commuter district, and NYC’s own leave law.SUI wage base$17,600
- ComplianceCompliance and filings in New YorkQualifying in New York is cheap ($225, then $9 every two years). The calendar is not: state and city returns on April 15, March mandatory first installments, and a March 10 unclaimed funds report.Application for Authority$225
- AdvisoryAdvisory: credits and decisions in New YorkNew York’s incentives are refundable but by application, through Empire State Development. The 2026 budget kept the 7.25% cliff rate, decoupled from R&E expensing, and left QSBS alone.Excelsior R&D tax credit50% of NY share of federal credit
Who you register with
- NYS Department of Taxation and FinanceCorporation franchise tax, sales tax, withholding, MCTMT and new-hire reporting
- NYS Department of LaborUnemployment insurance registration and rates, wage-and-hour rules
- NYS Workers’ Compensation BoardWorkers’ compensation, disability (DBL) and Paid Family Leave coverage
- NYS Department of State, Division of CorporationsApplication for Authority, biennial statements, LLC beneficial owner disclosure
- NYC Department of FinanceNYC Business Corporation Tax
- NYS Office of the State ComptrollerUnclaimed funds reporting
Hiring across the border
An employee who lives in one state and works in another is the most common way a startup ends up registered in two. These are New York’s neighbors.
- CTConnecticut1% tax on business SaaS, weekly paydays, and a surtax that reaches every combined group
- MAMassachusettsPFML, a strict ABC test and same-day final pay; SaaS taxable at 6.25%
- NJNew JerseyDisability and family leave through payroll, the ABC test, and NOLs you can sell
- PAPennsylvaniaFlat 3.07% state tax, local wage taxes nearly everywhere, and taxable SaaS
- VTVermontSaaS taxable since 2024, a 0.44% child care payroll tax, and a receipts-based minimum tax
Common questions
How many corporate returns does a startup in New York City file?
Usually two, sometimes three. New York State’s Form CT-3 is the franchise tax; if you have activity in the twelve-county commuter district, Form CT-3-M adds the MTA surcharge; and if you do business in the five boroughs, NYC’s Business Corporation Tax is a separate return (Form NYC-2) to a separate agency, the NYC Department of Finance.
Is our SaaS product taxable in New York?
Yes. New York taxes prewritten computer software as tangible personal property no matter how it is delivered, and the Department’s bulletin names remote access explicitly. Custom software built to one customer’s specifications is not taxable; software that is not designed for a particular purchaser is.
Do we have to report contractors to New York?
Yes, if the contract is over $2,500. Since January 1, 2022, New York has required employers to report individuals working under an independent contractor arrangement with contracts in excess of $2,500, through the same new-hire reporting channel used for employees.
Our payroll provider handles taxes. Does that cover disability and Paid Family Leave?
Yes, separately. New York requires disability benefits (DBL) and Paid Family Leave coverage in addition to workers’ compensation. Both are bought from an insurance carrier (or the State Insurance Fund), not paid to a state agency, and a company becomes a covered employer four weeks after it has had at least one employee on 30 days in a calendar year.
Does the New York LLC Transparency Act apply to our Delaware C-corp?
No. The New York LLC Transparency Act, in effect since January 1, 2026, applies only to limited liability companies formed under the law of a foreign country and authorized to do business in New York; the Governor vetoed a bill in December 2025 that would have extended it to US LLCs. Each covered LLC files a beneficial owner disclosure or an attestation of exemption with the Department of State ($25). A Delaware C-corp, or a Delaware LLC, is outside it.
Does New York have an R&D credit a seed-stage startup can claim?
Not automatically. The state’s R&D credit for most companies comes through the Excelsior Jobs Program, which Empire State Development admits companies to based on job and investment commitments. Once admitted, the Excelsior R&D credit is 50% of the share of the federal research credit tied to New York expenditures, capped at 6% of New York research spending, and it is fully refundable.
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- NYS Department of Taxation and Finance — Corporate taxes (tax facts)
- NYS Department of Taxation and Finance — Form CT-3-I instructions (2025)
- NYS Department of Taxation and Finance — Form CT-3.4-I, Net Operating Loss Deduction (2025)
- NYS Department of Taxation and Finance — Notice N-26-1 (IRC §§ 168(n), 174 and 174A decoupling)
- BDO — New York passes fiscal 2027 budget
- NYC Department of Finance — Business Corporation Tax
- NYS Department of Taxation and Finance — MCTMT for employers
- NYS Department of Labor — Unemployment insurance rate information
- NYS Department of Labor — NYS-45 quarterly reporting and UI wage base
- New York State Paid Family Leave — 2026 updates
- NYS Workers’ Compensation Board — Disability and Paid Family Leave coverage requirements
- NYS Workers’ Compensation Board — Disability benefits for employers
- NYS Department of Labor — Minimum wage
- New York State — Paid sick leave
- NYC Department of Consumer and Worker Protection — Protected Time Off Law
- New York Labor Law § 191 — Frequency of payments
- NYS Department of Labor — Frequency of pay
- NYS Department of Taxation and Finance — New hire reporting
- NYS Department of Taxation and Finance — Withholding tax
- NYS Department of Taxation and Finance — Registration requirement for businesses with no physical presence
- NYS Department of Taxation and Finance — Do I need to register for sales tax?
- NYS Department of Taxation and Finance — Computer software (TB-ST-128)
- NYS Department of Taxation and Finance — Filing requirements for sales and use tax returns
- NYS Department of Taxation and Finance — Publication 718, sales and use tax rates
- IRS Publication 1220 — Combined Federal/State Filing participating states
- NYC Department of Consumer and Worker Protection — Freelance workers
- NYS Department of Labor — Freelance Isn’t Free Act
- NYS Office of the State Comptroller — Unclaimed funds reporting, general corporations
- NYS Department of State — Application for Authority, foreign business corporation
- NYS Department of State — Biennial statements
- NYS Department of State — Beneficial owner disclosure (LLC Transparency Act)
- Empire State Development — Excelsior Jobs Program
- NYS Department of Taxation and Finance — Definitions and rates for Article 9-A corporations
- NYS Department of Taxation and Finance — NYS-50-T-NYS, 2026 withholding tables and methods
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.