The New York legislature convened a special session and voted in favor of personal income tax reform. Governor Andrew Cuomo has signed the bill (S.B. 50002) into law. The rate changes will be in effect from January 1, 2012 through December 31, 2014 (tax seasons 2013 - 2015).

Under the bill, the previous top personal income tax rate of 6.85% is decreased for taxpayers in certain income ranges and a new top tax rate is added. Starting in 2012, the top personal income tax rate:

• Decreases from 6.85% to 6.45% for New York taxable income over $40,000 and less than or equal to $150,000 ($20,000 to $75,000 for single filers)
• Decreases from 6.85% to 6.65% for New York taxable income over $150,000 and less than or equal to $300,000 ($75,000 to $200,000 for single filers),
• Remains at 6.85% for New York taxable income over $300,000 and less than or equal to $2 million ($200,000 to $1 million for single filers), and
• Increases to 8.82% for New York taxable income over $2 million ($1 million for single filers).

We expect the New York Department of Taxation and Finance to provide additional guidance and new 2012 withholding tables to reflect these changes.