Pay New York State Taxes

Key takeaways:

• There are numerous ways you can pay your taxes, including online bank account payments, online credit card payments, checks, and money orders.
• If you cannot pay in full, you may look into an installment agreement or an offer in compromise.
• Those who fail to pay their taxes risk sizable penalties, loss of assets, and wage garnishment.
• McLaud Law P.C. is committed to helping you navigate your New York State tax issues to find a solution that fits your needs.

Ways to Pay New York State Taxes

When you receive a tax bill, there are several ways you can pay. Learn more about these options to figure out which one best suits your needs.

Online Payments

There are two ways you can pay online. If you authorize a direct debit with your bank or credit union, you can pay directly from your checking or savings account, get instant confirmation of your payment, and avoid any fees. You can also choose to pay by credit card, although that option does incur a 2.2% service fee.

Mail Payment Options

If you’ve received a bill, you can also mail your payment to the following address:

NYS Assessment Receivables

P.O. Box 4127

Binghamton, NY 13902-4127

Your check or money order should be made payable to Commissioner of Taxation and Finance. Include your ten-digit assessment or case number and your taxpayer ID number in the memo line.

If you are making a payment for your personal income tax return, you must submit Form IT-201-V with your payment. The address you send your payment to depends on whether you e-filed or sent in a paper return. If you are paying for a previously filed return or an e-filed return, your payment and Form IT-201-V go to:

NYS Personal Income Tax Processing Center

P.O. Box 4124

Binghamton, NY 13902-4124

If you submitted a paper return, send the form and your payment to:

State Processing Center

P.O. Box 15555

Albany, NY 12212-5555

In-Person Payments

You can make payments and even file your taxes in person with the help of the Taxpayer Assistance Program. You have to sign up for an appointment online to do this. Bring your state-issued ID, income tax documents, and your last year’s tax return.

Electronic Funds Withdrawal

If you work with an e-file provider who helps you file your taxes, they may submit paperwork allowing you to pay your taxes via an electronic funds withdrawal. If you are submitting a payment for tax year 2024, they’ll fill out Form IT-370. If you are submitting a payment for tax year 2025, they’ll submit Form IT-2105.

Another electronic option similar to this is Quick Pay. This is ideal for those who do not have an Online Service account but still want the convenience of immediate confirmation of payment. You must have your case number and information from your filed return to make a payment.

Business Tax Payment Options

Those making business tax payments can utilize the same options offered to individuals. You can use your Online Services account to pay online or pay without an account via Quick Pay. You are also permitted to send your payment in the mail for some taxes, but for certain business taxes, you may be required to pay online.

The Department generally recommends that businesses use Online Services to manage their business taxes. With an Online Services account, businesses can file sales tax returns and make payments from a saved account.

Paying Estimated Taxes

If you are required to make estimated income tax payments, there are a few options to consider. First, you can use one of the New York State-approved software options, which include FreeTaxUSA, CrossLink, and TurboTax, among many others. You can also use your Online Services account to pay from your bank account or credit card. 

If you send a direct debit from your bank account, you can receive instant confirmation that your payment was accepted. Credit payments are permitted but come with a 2.2% convenience fee.

To calculate your estimated tax payments, you can use Form IT-2105 and the instructions that come with it. The instructions include a worksheet for calculating what your estimated payments should be based on your adjusted gross income.

What to Do If You Cannot Pay

If you cannot pay your state taxes in full, you aren’t alone—and you have options. Many of the options provided by the New York State Department of Taxation and Finance are similar to those offered by the IRS, so if you’ve ever struggled with federal tax concerns, some of these may be familiar to you. 

However, it’s important to note that state tax programs and federal tax programs are separate—qualifying for one option in your state doesn’t guarantee that the same option will be available to you for your federal taxes, and vice versa. 

Installment Payment Agreements

New York taxpayers can apply for an installment payment agreement via their Online Services account. Penalties and interest continue to accrue until your tax debt is paid in full. You can apply online for any state tax balance of $20,000 or less. 

You must be able to pay your balance off within 36 monthly payments. Many taxpayers opt to have their payments automatically withdrawn from their account on the due date every month to avoid falling behind and defaulting on their payment agreement.

If you do not need 36 months to pay off your tax debt, you may consider requesting a one-time extension. This option is suitable for those who cannot currently pay in full but will be able to do so within the next 60 days.

What if you owe more than $20,000 or cannot pay your balance in full in 36 months? Do not apply online. Instead, you should call the Department of Taxation and Finance directly to talk to a representative and request an installment payment agreement.

Offer in Compromise

New York also maintains an offer-in-compromise program for financially distressed taxpayers. This program is available for those who fit into one of these categories:

• Insolvent or bankrupt; this option is available for individual and business taxpayers
• Payment in full would cause undue hardship; this option is only accessible to individual taxpayers

What is undue hardship? If payment in full would leave you unable to pay your basic living expenses, which are based upon IRS Collection Financial Standards, you may qualify for an offer in compromise. When processing offers in compromise applications, New York considers whether or not an offer is in the best interest of the state and other taxpayers. This means that even if you qualify, your application may not be approved. 

If your offer in compromise is accepted, you must comply with all tax laws for the next five years. They may also apply any tax refunds, credits, and funds that can legally offset your tax debt to your tax debt. If you fail to meet these guidelines, your order may be revoked and the original tax liability may be reinstated.

Financial Hardship and Temporary Deferments

If you’ve looked into IRS payment options, you may be familiar with currently not collectible status, which temporarily stops collection actions for those who qualify. Currently, New York does not have any official program similar to this for taxpayers facing financial difficulties. To request temporary deferment due to financial hardship, you’ll need to contact the Department directly to discuss your options.

Consequences of Non-Payment

The DTF utilizes its Civil Enforcement Division to collect past-due taxes. You may face a number of consequences if you fail to pay your taxes:

• Penalties: The Department can charge a number of penalties if you fail to abide by tax law. Late filing leads to a penalty of 5% per month, up to a total of 25% of the total balance. The late payment penalty is 0.5% per month. Taxpayers who calculate their taxes incorrectly, resulting in the greater of an underpayment of 10% or $2,000, the penalty is 10% of the difference between what you reported and what you owed. The state charges hefty penalties for errors caused by negligence, fraud, and frivolous returns.
• Funds offset: If funds are owed to you via tax refunds, contract payments, or lottery winnings, those funds may be used to pay off your tax debt.
• Tax warrant: A tax warrant is essentially a civil judgment against you that lays claim to your real and personal property. A tax warrant allows the Department of Taxation and Finance to seize your assets, garnish your wages, or keep you from selling your property.
• Asset seizure: Once a tax warrant is filed, the next step is the seizure of your assets. The Department can take ownership of your assets, sell them at auction, and use the proceeds to pay your debt.
• Levies: The Department may levy the funds in your bank account to pay your tax debt in part or in full.
• Income execution: This is a levy of your wages that the Department may request if you do not address your tax debt. Up to 10% of your gross wages may be seized and given to the state.
• Driver’s license suspension: Taxpayers with at least $10,000 in tax debt may have their New York State driver’s license suspended.
• Private debt collection: If other collection efforts fail, the state may refer your debt to a private collection agency.

These consequences can significantly impact your ability to earn a living, provide for your family, and maintain your financial stability. The team at McLaud Law P.C. can negotiate on your behalf to limit the financial fallout of your unpaid taxes and work towards a fair agreement.

Facing New York State tax issues can be stressful. Whether you’re struggling solely with state tax debt or you need help with state and federal tax concerns, the team at McLaud Law P.C. can help you. If you’re struggling to pay your New York State taxes and you’re interested in negotiating a settlement or a payment plan, reach out to McLaud Law P.C. today. We can help analyze your situation and negotiate on your behalf to obtain the best possible resolution to your tax problems. Give us a call at 585-397-7785 or contact us online.

Frequently Asked Questions

How can I pay my NYS taxes online?

You can pay with your bank account without incurring any fees, or you can pay with a credit card and pay a 2.2% convenience fee.

What happens if I can’t pay my taxes in full?

You can either work with the Department to set up a payment plan or request an offer in compromise. Otherwise, there is a good chance they will pursue more aggressive collection actions against you.

Can I set up a payment plan for my NYS tax bill?

The Department of Taxation and Finance allows online applications for tax debt of less than $20,000 that can be paid in 36 monthly payments or less. If your debt exceeds this limit or you need more time, you must call them directly to request a payment plan.

What is an offer in compromise and do I qualify for one?

An offer in compromise settles your tax debt for less than its value. You may qualify if paying in full would cause you undue hardship. The Department determines whether or not individuals qualify on a case-by-case basis.

Are there penalties for late payments?

Yes. The late payment penalty is currently 0.5% of the balance for every month or partial month that the balance is unpaid.

How can McLaud Law help if I’m struggling with NYS tax debt?

McLaud Law can help you negotiate a fair payment plan, request relief from penalties, or apply for an offer in compromise.

This communication is Attorney Advertising. It is presented for informational purposes only and does not constitute legal advice. Every legal situation is different, and prior results do not guarantee a similar outcome. This communication does not create an attorney-client relationship between McLaud Law P.C. and the recipient.