Ways to Pay New York State Taxes and Consequences if You Don’t

You may have more options for paying your New York State tax bill than you realize. Whichever option you choose, don’t wait too long. Here’s what you should know. Paying your New York State taxes on time is essential, but knowing how to make a payment or figuring out what to do if you can’t pay in full isn’t always easy. Thankfully, the New York State Department of Tax and Finance (DTF) offers several options for NY taxpayers, including convenient online payment processing and installment agreements. Keep reading for an overview of how to pay your NYS taxes.

How Do I Pay My New York State Tax?

Taxpayers can find helpful resources and access online services at tax.ny.gov. Through New York State’s online services, individual taxpayers can make a payment or request an installment agreement (more on that below). To pay your tax bill this way, you need to create a NY.gov ID if you do not already have one. You can create an account in a few easy steps:

• Visit my.ny.gov, and choose to create an account.
• Choose whether you are creating an individual, business, or employee account.
• Fill out your name and email address.
• Create a username, and verify your email address.
• Create a password, and choose your security questions.

Suppose you received a statement concerning a New York State tax audit, unreported income, or a bill regarding your personal income tax return. In that case, you should use New York State’s pay a bill or notice feature rather than the online services linked above.

How Individuals Can Pay NYS Taxes Online

Using the online services portal isn’t the only way to pay NYS taxes online. You can also pay your bill online via a direct debit from your bank account. When paying with your bank account, you can schedule advance payments and save your banking information for future payments. Best of all, this payment option is free. You can also use your credit card to pay your NYS taxes online. However, you will be charged a 2.2% convenience fee when doing so. That means you’ll pay an additional $22 for every $1,000 you pay NYS, but the process is quick and simple. Wells Fargo provides credit card payment processing services for the NYS DTF, and the company accepts Visa, Mastercard, Discover, and American Express.

How Businesses Can Make a NYS Tax Payment Online

Businesses must use a different online services account than individuals, but the features are very similar. With a business online services account, you can schedule New York State tax payments (including sales tax, withholding tax, and corporate tax), respond to notices from the DTF, and file your business tax returns.

Other Ways to Make a NYS Tax Payment

While making NYS tax payments online may be the most popular payment option, it isn’t the only one. Taxpayers may also pay income tax by check or money order and send the payment to the Department of Tax and Finance. However, when mailing a payment for your New York State taxes owed, you must also include Form IT-201-V. Additionally, you must follow the payment instructions carefully to ensure your payment gets credited correctly. Keep the following tips in mind:

• You must make the check or money order payable to New York State Income Tax.
• You must include your Social Security number, the tax year for which the payment corresponds to, and the words “income tax” on your check or money order.

When mailing a payment, you should send your Form IT-201-V and your check or money order to the following address. Note that mailing addresses published on forms made before 2014 are no longer accurate. STATE PROCESSING CENTER  PO BOX 15555  ALBANY, NY 12212-5555Note: The above mailing address only applies to correspondence that includes a tax payment. If you are not including a payment with your letter or form, visit tax.ny.gov or contact the DTF to find the correct mailing address for your situation.

Making NYS Estimated Tax Payments

Many NYS taxpayers can make estimated payments online, but this option isn’t available to everyone. If using one of the below forms, you will need to make your NYS estimated tax payments via check or money order.

• Form IT-2658 Report of Estimated Tax for Nonresident Individual Partners and Shareholders
• Form CT-2658 Report of Estimated Tax for Corporate Partners

Online service options for the above forms may be available in the future, but taxpayers who must send a tax payment via mail can find specific instructions by visiting New York State’s pay-by-check or money order webpage. Taxpayers who do not fall into the categories above have a few options for making estimated tax payments online.

• Individuals can make an estimated tax payment through NYS-approved tax software.
• You can make a payment through your NYS online services account.
• Direct debit online payments are available and free of charge.
• Online credit card payments are available but come with a convenience fee.

If You Owe State Taxes but Can’t Pay

It’s important to address your New York State tax bill, even when you can’t pay the amount you owe in full. Taxpayers who fail to pay can face costly penalties and interest charges. For example, the late payment penalty is 5% for every month (or partial month) the payment is late, and this penalty can grow to 25% of your balance if your taxes remain unpaid. But late payments aren’t the only things that can cost you. There are penalties for other mistakes, too.

• If you incorrectly calculate your tax owed, you could face a penalty of 10% of the difference between the NYS tax reported and what you actually owe.
• Underreporting tax — even by accident — can result in financial penalties and interest charges.

Penalties are the first consequence you face if you don’t pay your state taxes, but eventually, the DTF may try to collect the taxes from you involuntarily. To do so, the state may garnish your wages, seize your bank accounts, file a tax warrant, or levy your other assets. Seeking out alternative ways to pay your NYS taxes is always better than ignoring your tax bill or underreporting your tax liability. By setting up payment plans or making other arrangements, you can avoid harsh collection actions such as liens or levies.

Paying Your NYS Taxes in Installments

Some taxpayers may qualify to pay their NYS taxes owed in installments. A New York State tax payment plan allows you to make monthly payments until you have satisfied your bill. This is a good option for some people. However, you will continue accruing financial penalties and interest while making your monthly payments, so it is a more costly option than paying your bill in full. Taxpayers can request an installment agreement through their NYS online services account. Be sure to read through the terms carefully and follow the rules once approved. Failure to comply with the terms of your agreement could result in removal from the payment plan and collections activity.

Get Help With Paying Your New York State Tax Debt

If you need help paying your tax debt or want to know more about possible options and penalty abatement, don’t delay seeking assistance. The sooner you tackle your NYS tax problems, the more money you’re likely to save. A New York attorney may be able to help you with your state tax debt or even reduce it. Because not all individual circumstances are the same, you’ll want to consult with a professional to learn what options are available to you. The Timothy S. Hart Law Group, P.C. helps taxpayers with state and federal tax debt. Contact us today to see how we can help.