My New York State income tax refund finally arrived on Wednesday. It wasn't as much as I was expecting because it turned out I had made an error (using the wrong tax computation worksheet) in figuring my tax. This was a bit annoying although I can get some (but not all) of the difference back from New Jersey by filing an amended return which I did. Hopefully New Jersey will process this a bit faster than my original return. I was also annoyed to learn that although New York theoretically pays interest on refunds delayed more than 45 days this only applies if the interest is at least $1 so I was out of luck there too.
While looking over the New York tax computation worksheets I noticed something bizarre. Suppose a married couple is taking the standard deduction of $15,000 so that their taxable income (line 38) is $15,000 less than their AGI (line 33). Then if I have figured correctly, if their AGI is exactly $2,000,000 their tax will be $135,972.5 while if their AGI is just $50,000 more (that is $2,050,000) then their tax will be $179,487 or $43,574.50 more. This is a marginal rate of over 87%. Taking federal taxes into account some people in this situation seem to be facing a marginal rate of well over 100% for this income range. This makes no economic sense, it is just evidence that the New York legislature can't be bothered to write sensible tax laws.
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I'm glad you finally received your refund. Thanks for posting. I'll let you know when we've been told our work is "officially" done (whatever that might actually mean).
ReplyDeleteAs for the 87% marginal rate, I can't help but think you made a mistake somewhere but, as you might imagine, the last thing I want to play around with when I get home from work is taxes. If I come up with anything I'll let you know.
Well, it's almost October and we're not done yet, as observed in this recent Albany TV news broadcast.
ReplyDeleteThanks for the update. Are there still returns that haven't been processed or are the remaining problems returns that were originally mishandled? You would expect some processing mistakes every year but I guess it would be no surprise if there are a lot more this year.
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