Yonkers Income Tax: The Surcharge NY Filers Forget

Yonkers Is the Only Other NY City With an Income Tax

New York City is famous for having its own income tax. Yonkers is the only other municipality in New York State with one — and it works completely differently from the city's version. Instead of a separate rate schedule, Yonkers uses two radically different taxes:

Both rates come straight from the state's official instructions: the 16.75% rate appears in the Yonkers worksheet of the Form IT-201 instructions, and the 0.5% rate is printed on Form Y-203 itself ("multiply line 5 by 0.5% (.005)").

How the Resident Surcharge Actually Works

The surcharge is 16.75% of your net New York State tax — the amount on line 46 of Form IT-201 after most credits. The official Yonkers worksheet:

Worked example

A single Yonkers resident with $100,000 of taxable income owes $5,432 of NY State tax under the 2025 rate schedule. The surcharge is 16.75% × $5,432 = $910. Total state-plus-Yonkers liability: about $6,342 — an effective 6.3% local load instead of the 5.4% state rate.

The surcharge scales with the *state* tax, so it is progressive without having its own brackets — higher-income Yonkers residents owe proportionally more.

The joint-return quirk

If you file jointly and only one spouse was a Yonkers resident all year, do not compute the surcharge on the combined state tax. You enter special condition code Y1, compute the resident spouse's surcharge as if you had filed separate returns, and attach a sheet showing the computation. Getting this wrong in either direction is a common error.

The Nonresident Earnings Tax: 0.5% of Yonkers Wages

If you live elsewhere but earn wages in Yonkers (or run a business or partnership there), you owe the Yonkers nonresident earnings tax on Form Y-203. The rules:

Worked example

A White Plains resident earns $60,000 working in Yonkers. No exclusion applies (wages exceed $30,000), so the tax is 0.5% × $60,000 = $300, transferred to line 56 of Form IT-201. At $25,000 of Yonkers wages, the $2,000 exclusion applies: 0.5% × $23,000 = $115.

There is also a limitation: a nonresident never pays more Yonkers tax than they would have paid as a Yonkers resident — worth checking for filers with unusual loss years.

Part-Year Moves and Form IT-360.1

Moved into or out of Yonkers during the year? You file Form IT-360.1, Change of City Resident Status, for the resident period (the 16.75% surcharge prorated to those months) and Form Y-203 for the nonresident period if you earned Yonkers wages then. Both forms submit with your state return.

Yonkers vs. NYC: The Key Differences

Yonkers residents also pay no NYC tax — the surcharge replaces it. That is why the state calculator asks for your location type: a Yonkers resident's liability is computed on a different line than a Brooklyn resident's.

What Yonkers Filers Should Check Every Year